National guilds and the state

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NATIONAL GUILDS AND THE STATE

BY THE SAME AUTHOR

NATIONAL GUILDS

AN ENQUIRY INTO THE WAGE-
SYSTEM AND THE WAY OUT

Second Edition. 6 s.

GUILD PRINCIPLES IN WAR
AND PEACE

Second Edition. 2s. 6d.

LONDON : G. BELL AND SONS, Ltd.

NATIONAL GUILDS

AND

THE STATE

BY

S. G. HOBSON

LONDON
G. BELL AND SONS, LTD.

1920

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PREFACE

The theoretical discussion in Part I. of this book on
the relations between producer and consumer and their
joint relations with the State presupposes that my readers
have some acquaintance with the principles and purposes
of the National Guilds movement. The argument is
largely the outcome of considerable controversy between
Mr. Cole and me, in which we each laid different stresses
upon the status of the consumer, and, in consequence,
upon the structure of the State. Although I think I
have in no way misrepresented Mr. Cole's views, never-
theless it was inevitable that the controversy, as it
appears here, should be ex parte. I recommend those
interested to read Mr. Cole's books so that they can
the better appreciate the points at issue. Particularly I
would draw attention to his preface to the third edition
of Self-Government in Industry^ in which, with char-
acteristic intellectual honesty, he materially modifies his
views upon the position of the consumer in relation to
the State.

I have referred to the National Guilds movement.
Is it a movement .'' There is certainly an organisation,
known as the National Guilds League, with an executive
committee and other officers, which publishes excellent
pamphlets, organises conferences, holds meetings, has
branches in various parts of the country, commands the
loyal support of its members, and, in general, possesses
the usual attributes of a living movement. Nevertheless,
it is perhaps more correct to regard it as an influence
rather than a movement. For this reason : unlike a

vi NATIONAL GUILDS AND THE STATE

political association, which can hope to give effect to its
principles by political action, National Guilds can never
be realised save by economic action and by industrial
associations. Primarily, it is the Trade Unions who
must constitute the driving force. The National Guilds
League, therefore, with the Guild writers, must content
themselves with the development and dissemination of
ideas. In that sense, it is an influence, a spirit, rather
than a movement. For my part, I would not have
it otherwise. Truth to tell, most of us, whose names
are associated with National Guilds propaganda, are
undeniably of middle-class origin. In the nature of
the case we cannot ourselves smash the wage-system ;
that supreme task rests with the organised proletariat.
We can but place our views before the wage-earners
for their acceptance. However strong our convictions,
whatever the degrees of our hatred of wagery, ultimately
it is the wage-earner himself who must strike his tent
and march.

So far as it is conscious and articulate, the doctrine
embodied in National Guilds has followed a course
somewhat different from other subversive movements —
the Socialist agitation, for example, with which National
Guilds has an obvious affiliation, sometimes expressed
in the term Guild Socialism. Socialism, to be sure,
has been rich in intellectuals, who, in sum total, have
profoundly affected the thought of the world ; but, in
the main, historically considered, it has been a working-
class movement, an inspiration to millions of class-
conscious workers, who at its touch have dreamed of
redemption from the dreadful grind of industrial life.
It is only in recent years that Socialism has politically
drawn to its banners any considerable number of the
academics and middle classes. Although the basis of
National Guilds is wage-abolition — could there be a
stronger appeal to the wage-earner .'' — yet from its
inception, six or seven years ago, down to to-day, it is
broadly true that the idea, rooted no doubt in industrial

PREFACE

vn

reality, first found lodgment in academic and intellectual
circles. The result is that the theory and literature of
National Guilds bear little, if any, relation to the numerical
strength of convinced Guildsmen. Intellectually, the
doctrine has loomed large ; numerically, we are, I fear,
a feeble folk. University students have had to answer
examination papers upon the economics of National
Guilds ; the vast majority of the workers have, as yet,
heard but vaguely of the new evangel.

There are several reasons for this curious anomaly.
The new movement has not yet developed a popular
writer. No young Cobbett has come our way ; no
young dramatist has been seised of the idea ; no young
poet has captured rich raptures at our altar. They
will arrive in good time ; we have just begun. I think,
however, we must look deeper for the true explanation.

If we examine the democratic movements of the past
century, we shall see that, with the possible exception
of Chartism, which partially embodied a philosophy
of life, and whose influence, in consequence, persisted
through two generations, they generally concentrated
upon one single issue, which might be purely political
or quasi-economic — the franchise, first for the artisan,
next for the agricultural labourer, old age pensions,
reform of the poor-law, land reform, the eight-hours
day, and the like. None of these represented a new
scheme of life or emanated from a new philosophy.
Each might be incorporated in the law with no funda-
mental change in the social or industrial system. One
might with truth affirm that each and all strengthened
the existing order. The whole body of factory rules
and regulations is to-day not a menace but a buttress
of the large industry. It has brought automatic machinery
in its train to speed up capitalist production ; it has
conferred the odour of respectability upon the manu-
facture of shoddy. But the moment a new doctrine
touches the existing fabric, we are' plunged into the
complexities and subtleties of a civilisation that inherits

viii NATIONAL GUILDS AND THE STATE

the past and is perplexed by the present. Each com-
plexity must be met by patient examination, each subtlety
brought to its true focus, a new psychology must confront
each outworn tradition. All this spells detailed and
exhausting work, intellectual candour, invincible faith.
The consequence is that, be it never so sound, the new
doctrine only " gets across the footlights " with the
greatest difficulty. It generally happens, too, that the
more spectacular aspects are the least important, and
yet the first to strike the popular imagination. For
example, the most obvious and attractive feature of
National Guilds is their outward form and construction.
This appeals to the practical instinct of the English
people, who are drawn towards the concrete and the
definite. It was, therefore, not surprising to find such
organisations as the Whitley Councils almost universally
described as experiments in, or steps towards. National
Guilds. I have been repeatedly congratulated upon
such a famous victory, and I doubt not that Mr. Cole,
Mr. Reckitt, and other Guild writers have had the same
experience. But the essence of the Guild idea is the
abolition of the wage- system, with the consequent
elimination of the master class. The new network
of Industrial Councils, far from abolishing the wage-
system or the master class, formalises, sanctions, and
strengthens both the one and the other. The reason for
this exasperating misunderstanding is that the Guild
analysis of the wage-system is subtle and difficult to
grasp, whilst its application to industry in all its Protean
forms is matter rather for the student than " the man
in the street."

Unless, therefore, my readers grasp the meaning
of the wage-system, as analysed by all the Guild writers,
they will not appreciate the fundamental argument of
this book. It is extraordinarily difficult to keep men's
minds on the dominant fact of modern industry that
the wage relation poisons or distracts every social
controversy. There is no solution of any social problem

PREFACE ix

to-day if it predicate the continuance of wagery. Yet
wagery remains the permanent hypothesis of every
conventional writer and thinker. I take almost at random
two quotations from the current literature on my table.
The first is from the weekly contribution of the dis-
tinguished writer in the Nation known as " Wayfarer."
" We despise ideas and fail to see that an idea is upsetting
the world, an idea which for many of us is old and dis-
credited. What is the notion that sustains the revolt
of Labour here and elsewhere .'' What but Marx's
theory of surplus value .'' It is a stirring fallacy embedded
in an unreadable book. Most of the economists have
fallen upon it. I was brought up in the belief that the
Fabian Society had analysed it out of existence. It is
obviously untrue as a description of the workman to-day.
He is not living on a wage of barest subsistence, the rest
of the industrial product, which is rightly his, having
been absorbed by the capitalist. On the contrary,
the elasticity of the wage-system even under capitalism
would have astonished the great Socialist thinker had
he lived to witness it. Nevertheless, the magic formula,
though dead, yet speaketh." ^

My second quotation is from a Government advertise-
ment in the daily press of October 4, 1919, the day I
am writing. After tabulating the graded wage-rates,
rejected by the railwaymen, a note is appended : " As
the cost of living falls, the pound is wortla more and real
wages increase — that is your pound purchases more."

Now suppose we grant that the Fabian writers
analysed the Marxian " fallacy " out of existence. It
by no means follows that " surplus value " is dissolved
in the process. Surplus value is a fact and not a theory.
At the end of a great war out of which fabulous fortunes
have been exacted, when the word " profiteer " stinks
in our nostrils, what are these gigantic war-profits but
surplus value .'' " Wayfarer " would perhaps argue
that they are not surplus value because they are not

1 The Nation, September 27, 1919.

X NATIONAL GUILDS AND THE STATE

derived from " barest subsistence." Here, no doubt,
a verbal point can be scored against Marx, who wrote
before Mr. John A. Hobson had elaborated the economy
of high wages, and before he had witnessed the existing
wage variations under the trusts and combines. Never-
theless, it remains as true now as in the days of Marx
that wages are indubitably governed by the cost of
subsistence. The old phrase was " bare subsistence."
I do not insist upon the adjective. As an intellectual
exercise, it could be maintained ; it is not, however,
essential to the argument. The real formula is sub-
sistence necessary to the maintenance and development
of a particular industry. There are several categories
of social problems — decasualisation, physical deteriora-
tion, human wastage, housing, and the like — that hinge
upon bare subsistence ; the sustenance of the wage-
earner at a level necessary to a skilled industry is an
economic problem, pure and simple. It is the confusion
between the social aspects of bare subsistence and the
economic aspects of an industrially essential subsistence
that has led to loose thinking upon the implications of
surplus value. Put bluntly and inhumanly, it costs very
little to train and maintain a scavenger ; it costs perhaps
ten times as mvich to train and maintain an engineer.
But, in the end, from the standpoint of industrial power,
what is the difference ? I remember, in the days of
my youth, a declaration by Mr. Frederic Harrison to
the effect that only a fortnight stood between the workman
and the workhouse. The fortnight may now be extended
to a month. What if it be three months ? Under the
wage-contract, whereby the worker, of his necessity,
forgoes any share in or control over the product, the
result in every trade is inevitably the same. That is
to say that an increased expenditure, by the medium of
higher wages, upon improving the quality of the labour
commodity, in no way invalidates the theory that wages
are based upon subsistence. The " elasticity of the
wage -system," upon which " Wayfarer " comments.

PREFACE xi

does not ■ modify the inequity of the wage-contract.
The wage-earner remains in servitude. It is the fashion
of the harness that varies. Mr. Massingham suggests
that there should be an attempt " to restate the elements
of value and disinter the Fabian criticism of Marx."
It is the main business of political economy to discover,
define, explain, and restate the elements of value. It
is to be hoped that the elements of value have many
times been examined and restated since the days of
Marx. But the controversy. In the sense indicated, is
dead ; it has merged into the great living issue of the
extirpation of the wage-contract.

If " Wayfarer " harbours any doubts whether there
is more than meets the eye in the theory of surplus
value, the Government note, quoted above, should at
least give him pause. For what precisely is meant by
the assertion that " as the cost of living falls the pound
is worth more and real wages increase " .'' We need
not discuss the grave admission that our boasted stable
currency is no longer stable, even though upon it an
inviting chapter lies to my hand. My readers will indeed
find something upon it in the text. The immediate
point is that no sooner do you arrive at nominal wages
than you must start again upon an enquiry into real
wages. There always has been a certain divergence
between nominal and real wages, but never so acute
as to-day. Now I do not think it will be disputed that
these fluctuations in currency value bear hardly upon
labour and all small debtors. In any event, the wage-
earner pays both ways. High prices, cheap pounds ;
high wages less than high prices ; cheap pounds, reduced
wages. As capital, through its docile Instrument
finance, controls the commodity currency, it is evident
that, even if nominal wages apparently refute Marx,
real wages are still based upon subsistence, and even
bare subsistence. The capitalist not only controls pro-
duction ; he can bring labour back with a jerk to the
subsistence level by the ingenious mechanism of currency

xll NATIONAL GUILDS AND THE STATE

and prices. There is a tendency to blame the Banks
for this. The banking organisation of this country is
not a separate interest, a self-contained sovereignty.
It is an integral, almost a subsidiary, part of the industrial
and commercial system. It would be a profound
blunder to make it the whipping-boy for its masters,
the great industrial magnates and associations.

I have not wantonly dragged into this Preface the
subjects of surplus value, bare subsistence, currency,
and prices. They happen to be topical problems that
throw light upon the wage-system. They are material
to lend emphasis to the fundamental fact that every
argument in this book strikes its roots into the subsoil
of a system as universal as it is disastrous. It would
be equally easy to trace its absurdities, anomalies, and
biting ignominy in almost every paragraph of every
periodical. So universal is it, so all-pervading, that we
accept it as a permanent hypothesis, as the one inevitable
condition, that only occasionally does some uncon-
ventional critic seriously enquire into its validity. Yet
it eats into the vitals of industry : vitiates, where it
does not caricature, our social and political life. It
breeds discord and perpetuates inefficiency ; it divides
mankind into hateful segregations — the " Two Nations "
portrayed by Disraeli in Sybil. Naturally, in parental
pride, I want National Guilds established ; but the
essential thing, the supreme task, is wage abolition, the
restoration of the product to the producer.

Since this book was planned and written, there have
been certain developments upon which I wish briefly
to comment. In a living community such as ours we
are confronted with a situation in which nearly all move-
ment is dynamic, in which habits and customs are
transitory, and whose social principles are by no means
static. The ink is barely dry before new conditions
arise and new tendencies are disclosed. Upon these
ceaseless activities we found our hopes, but it lays an
almost intolerable burden upon the writers and critics.

PREFACE xin

Why write a line if to-morrow our words are dead in
the presence of the accomplished fact, the unexpected
or the unforeseen ? Nevertheless one is occasionally
fortunate in hitting upon some underlying principle at
once theoretically sound and achievable in practice. I
think that the Guild writers may claim, without mock
modesty, to have evolved a social and economic doctrine
which derives strength and sanction from each new
development. The analysis of the wage-system in
National Guilds, published in serial form in 1912 and
1 9 13 and in book form in 19 14, still remains as true
as when it was written ; the main constructive idea,
known as National Guilds, draws nearer and yet nearer
to realisation. Have recent events changed or modified
our views }

There has been one important adventure in theory,
namely. Major Douglas and Mr. Orage's examination of
price as a factor in economic revolution ; the Labour Party,
by a large majority, has declared for " Direct Action " ;
there has been a series of strikes, some of great magnitude
and significance. On the horizon, too, has appeared a
little cloud, no bigger than a man's hand : an intimation
from the compositors to certain newspaper proprietors
that there were limits to what they would print of unfair
attacks upon their comrades on strike. In truth, the
pace is swift.

Mr. Orage regards price as the active principle of
distribution. The just price is one that " enables the
producers to purchase the whole of their product or its
equivalent— counting as producers the whole community."
Price, he argues, must be below cost because overhead
charges are reckoned in cost. But, since " consumption,
as represented by the purchasing- power of wages,
salaries, and dividends, is always less than production
as measured in price," and since overhead charges tend
to increase production and decrease purchasing capacity,
it follows that price must be fixed at a point below cost
at least equivalent to the cost of overhead charges. We

xiv NATIONAL GUILDS AND THE STATE

need not — certainly I do not — adopt this line of reason-
ing to understand that a social price may be imposed
without regard to its economic cost. It is certainly
significant that the two great Labour upheavals of 191 9
were in the two industries affected by the demand for
a social price as against the economic cost. The effect
of the mining settlement has been to add several shillings
per ton to the cost of coal. It is granted, however,
that the miner, in equity, is entitled to all and more
than he at present earns. In like manner, the railway
settlement either forces the Government to run the
railways at a great nominal loss, or, alternatively, to
raise passenger and freight rates. Let us, then, suppose
that our industry demands cheap coal and freightage.
Hitherto, when faced with this necessity, we have
adopted the simple expedient of depressing wages to
barest subsistence. That is no longer possible. The
Sankey Commission and the Railway Strike mark a
definite turn of policy, which recognises that labour
must not again pay in starvation wages ; that there must
be no return to the 19 14 standard. We therefore
arrive at an impasse. Coal is a dominant factor in
production. If its price rise beyond a given point,
industry after industry may be disrupted. Freightage
is a dominant factor in production. If its rates are
raised beyond a certain maximum, production may be
choked. In days gone by, the average man would
have said that the life of the nation must not be endangered
by selfish miners and railwaymen. To-day he recognises
that the loss must fall elsewhere. Must then the com-
munity pay } Are the manufacturers who obtain coal
and freightage under cost to be quit of any quid pro
quo } If not the individual employer, then have we
any claim upon the industry as a whole .''

In a world of profiteers one can vividly realise the
mad rush, the " lobbies " and " pulls," to benefit by
cheap coals and freight-rates at somebody else's expense.
If, however, there is substance in the suggestion that

PREFACE XV

prices of " key " products must sooner or later be
regulated by considerations other than economic cost, then
the logic of the situation involves a change in the status
of labour. You cannot contend that the social price
of a given commodity may be divorced from ascertained
cost (overhead charges included or excluded), unless
you apply this principle first to the labour commodity.
But if you put a price upon labour irrespective of its
commodity value, you inevitably change its status ;
it ceases to be a fluctuating factor in cost and
becomes a first charge upon production. Thus the
economic necessity of averaging cost throughout an
entire industry that price may ensure distribution,
lifts labour out of its commodity valuation and so destroys
the basis of the wage-system. It is generally admitted,
I think, that, throughout their whole range, post-war
prices are artificial, bearing little relation either to actual
cost or to their social values. It seems certain that the
function of price-fixing must in the near future rest upon
a more definite and conscious authority than the mere
higgling of the market. But no solution of the problem
is possible until we have discovered new methods and
principles of credit in its several phases.

The formal incorporation of " Direct Action " in
the programme of the Labour Party is an event of unusual
importance. The Labour Party acts only in a political
capacity and presumably, therefore, its acceptance of
this weapon is either ultra vires or a declaration that
economic powers must be pressed into its service. It
has no power to order a strike ; that is the preserve
of the Trade Unions. Why, then, does it advocate
" Direct Action " .'' Is it a counsel of despair } More
to the point, what is the Guildsman's attitude .''

We may dismiss the idea of despair. A political
party fully imbued with the belief that it will soon be
the arbiter, if not the actual dispenser, of power is
assuredly in no despairing mood. But we can readily
understand that twenty years' experience of Parliamentary

xvi NATIONAL GUILDS AND THE STATE

life has taught the Labour members, as well as the rank
and file, that under capitalism economic power dictates
political policy. They may accordingly decide that
two can play that game and call up their industrial
reserves. It is in the nature of the case that the exercise
of economic power in politics must be done more bluntly
and unaffectedly by Labour than by Capital. The
master-class is trained to government : knows how to
apply its economic power subtly and with a sure touch :
has long since elaborated a terminology that means
one thing to the master and an innocuous thing to the
masses. " Free-trade " was the master-stroke ; it still
leads Labour captive. But, we may enquire, why should
the purse rule the political roost when presumably the
function of politics is to apply principles of public
conduct ? What has the State to do with industry ?
The answer is, of course, that in the past generation
great economic responsibilities have been thrust upon
Parliament, which at the present time concerns itself
with industrial problems to the exclusion of its dis-
tinctively spiritual duties. If the political State is to
undertake these economic functions, then it follows
that the economic battle must be fought in Parliament
and its administrative purlieus. It is futile to condemn
Direct Action in politics, if politics is degraded from its
high estate to an economic class struggle. We cannot
have it both ways : either political life must revert to
its true purpose or we must expect Labour to bring
to bear its economic power, in ways it understands, by
methods with which it is familiar. The fault does not
lie with Labour ; it is inherent in the existing inter-
mixture of prostituted politics with misapplied economics.
The Railway Strike of 1919 illustrates the point. The
men took a view of their industrial position not acceptable
to the management, which happened to be the State.
Wages are still wages, whether paid by the State or
the private employer. To strike against the private
employer is now recognised as all in the day's work.

PREFACE xvii

But when the State chances to be the employer the
strike is denounced as "an anarchist conspiracy," as
treason, as an attack upon the community. Apparently
it occurred to no one that it was the State and not the
men which was in a false position. And so it is in
regard to Direct Action. What is it that would unite
Labour in Direct Action .'' Clearly something which
binds it in functional unity. That normally can only
be an industrial issue of prime importance. Should
Direct Action be taken on a purely political question,
then a state of affairs has arisen to justify a revolution.

One of the strongest reasons in favour of National
Guilds is that all, or practically all, industrial functions
are withdrawn from the State and distributed through
the Guild organisation. Guildsmen, like other mortals,
may and do take individual views of the State structure
in relation to the Guilds, particularly how and in what
circumstances a special duty is thrown upon the State
to protect the consumer as such. In practice that may
mean a greater or less remnant of industrial responsibility
retained by the State — but a remnant none the less. In
this way we undoubtedly purify politics, release from
bondage the human judgment in public affairs, and
cut away all grounds for Direct Action, which can only
be justified when the State engages in industrial activities
alien to its true role.

The threat of the compositors not to print certain
opinions distasteful to trade-union sentiment had better
be considered very seriously before it is accepted as a
principle. A la guerre comme a la guerre; it was incidental
to the railway strike. But the preservation of our
right to speak, write, and publish what we do veritably
believe is a cardinal matter. It is more precious to the
community than any conceivable industrial organisation.
The spirit must have the freedom of its wings.

S. G. H.

Manchester,

December 19 19,

CONTENTS

PART I.— THE PRODUCER, THE CONSUMER,
AND THE STATE

PAGE

I. Producers and Consumers .... 3

II. The Consumer . . . . 22

III. The Producer. . . . . -33

IV. The Consumer further considered . . .49
V. Distribution . . . . . .63

VI. Function and the Class-Struggle . . .80

VII. Nation, State, and Government . . .96

PART II.— TRANSITION
I. Signs of Change
II. The Workshop

III. The Influence of the War upon Labour

IV. The Profiteer
V. The Equities of Expropriation

VI. The Civil Guilds
VII. The Civil Guilds {continued) .
VIII. The Civil Guilds (continued) .
IX. Finally, I believe

APPENDIX

On the Reorganisation of University Education. By M. W.
ROBIESON, M.A. . . .- .

xix

H7
172
226
272
281
292
321
337
345

363

PART I

THE PRODUCER, THE CONSUMER
AND THE STATE

PRODUCERS AND CONSUMERS

I cannot recollect seeing any examination of what appear
to me the two main objections to the Guild theory. These are :
(i) That the Guilds will be profiteering societies, armed with
economic power, and having interests opposed both to the interests
of other Guilds and to those of the non-producing members of
the community — the old, the young, and the Tiousekeeping
women ; (2) that the theory is based on the control of industry
by the producers. That this principle has been widely tried (see
Fabian Research Committee's publication on the matter), and
for two main causes has regularly failed. These two causes are
(a) that the workers develop a vested interest in the tools and
processes to which they are accustomed and are unwilling to
change ; and (b) that when the manager is appointed by the
workers he gets more interference than is compatible with manage-
ment. The upshot of these two forces is relative ineiEciency,
which in due course has led to failure. I have heard the Secretary
of the National Guilds League sing a paean in praise of inefficiency.
But in practice it must certainly mean longer hours or shorter
holidays or a lower standard of comfort. Faced with this issue,
it therefore seems to me that, providing — an all-important con-
sideration — the well-being of the producers can be otherwise
secured, the community is likely to select the rival principle, the
control of industry by the consumers, in the shape of the State,
the municipality, or the co-op. Very likely, however, there is
some reply on this matter of which I am ignorant, and which
other readers besides myself would be glad to hear. — Mr. A. K.
BuLLEY, Letter to the Writer.

In the last chapter of your book, Gui/d Principles in War
and Peace, you endorse Mr. Anderson's contention that the
capitalist is the real protagonist of the consumer. But the
National Guilds League always seems to argue that the State's

3

4 NATIONAL GUILDS AND THE STATE

justification for representation upon the Guilds Congress is that
it protects the consumer. You cannot both be right. — Mr.
Godfrey Jackson, Letter to the Writer.

I. Producer and Non-Producer

Mr. Bulley assumes that the fundamental Guild
theory is the control of industry by the producers, and
upon that assumption he bases his argument. The
underlying theory of Guild doctrine is the rejection of
the commodity theory of labour. Mr. Bulley may
reply that, even so, he is substantially right, because
the refusal to treat labour as a commodity involves
the control of industry by the producer. Before we
can discuss that point it is imperative that we should
reach an agreed definition of " producer." We are
all of us apt to use the word loosely. We think of
the producer as one who is exclusively engaged upon
a productive process — coal-mining, iron and steel work
from the ore to the finished article, textiles, and so on.
I have never heard of a railwayman, or a carter, or a
clerk, or a journalist described as a " producer." If
Mr. Bulley has in mind the narrow meaning here indi-
cated — producer as distinct from worker — then I can
only reply that there is nothing in Guild theory to
warrant the assumption that industry should be con-
trolled by the " producer." If, however, he gives the
word a wider connotation, meaning a man or woman
for whose work there is a social demand, then it is
difficult to follow his argument, for we are faced with
a community of workers, including " housekeeping
women," and the distinction between producers and
consumers loses its significance. But I am not certain
if Mr. Bulley does not accept the broad interpretation,
for he seems to limit the non-producers to the old and
young and the housewives. It is improbable that
any body of economically emancipated workers, con-
stituting, in fact, the whole nation, would for a single

PRODUCERS AND CONSUMERS 5

day contemplate the social subjection of such as these.
If it were so, no economic rearrangement would mend
matters, for their political power would malignly assert
itself in correlation with their economic power. Our
attitude towards our families (for that is what it comes
to) is fundamentally ethical and social, and not economic.
Who, then, are the other non-producers .'' If there is
none, then our problem is confined to a possible corporate
struggle between the Guilds, If, however, Mr. Bulley
postulates a body of workers who are nevertheless non-
producers, and in consequence economic victims of the
Guilds, then he has misconceived the economic effect
of the rejection of the commodity theory.

As we are not now concerned with non-workers,
whether investors or tramps, we may perhaps arrive
at the distinction between producers and non-pro-
ducers by defining the former as those for whose pro-
ducts there is an effective economic demand, and the
latter for whose services there is a social demand.
(Incidentally we may remark that if labour be really
a commodity, the economic demand is primarily for
the labour and not its product, whereas if it be essen-
tially a living and human thing, the demand for it
ceases to be economic and becomes social. Nor must
we confuse commercial with economic demand. To
admit commercial demand into our problem would be
fatal to the theory of qualitative production, which
must ultimately be a vital issue in Guild policy.) I
am not prepared to define here economic and social
demand — that in its turn depends upon our future
appreciation of function — but broadly stated, economic
demand may be restricted to wealth production and
social demand to wealth distribution. Thus, all those
who are engaged on the production of commodities
(properly so-called), in every stage, from the raw material
to the product finished and delivered, may be said to
be producers. But there is a large army of workers
whose services are demanded in social life — writers.

6 NATIONAL GUILDS AND THE STATE

artists, preachers, actors, professional footballers, dog-
fanciers, billiard-markers. There is a social demand
for all these, not strictly economic, yet having an
economic bearing. They may be all defined as " non-
producers." I apprehend that Mr. BuUey fears that
these non-producers' interests are " opposed " to the
producers' ; that whereas the former are not susceptible
to Guild organisation, the latter are, and, in consequence,
would have the non-producers at their mercy.

Even if it were so, the non-producers would be no
worse off than they are to-day. One and all, their
occupations may be described as appetitive ; in their
several ways and varying degrees they minister to the
spiritual, intellectual, and carnal appetites. That is to say,
they are primarily concerned with the expenditure of
life-energy. As under the wage-system the proletarian
has little, if any, surplus energy after the purchase of
his labour commodity, the appetitive occupations are
necessarily restricted in their scope or degraded by
their subservience to the present possessing classes. But
the object of economic emancipation being to release
life-energy that we may live on a higher spiritual and
intellectual plane, it follows that the demand for the
appetitive services would increase to a degree not now
realisable. The problem would then revolve round the
several functional values of these appetitive occupations
and not their remuneration.

A concrete case may help us. Let us assume a
church whose congregation is almost entirely prole-
tarian. The priest or pastor does not depend upon
such a congregation for his stipend, which comes either
from the one or two rich men in his congregation or
from the church organisation, which finally depends
upon the rich members of that particular religious
connection. If, however, this proletarian congregation
finds its economic power enormously increased by Guild
organisation (secured by the labour monopoly) it no
longer lives or thinks on the subsistence level, becomes

PRODUCERS AND CONSUMERS 7

master in its own spiritual house, releases its priest or
preacher from dependence upon rich men, and so un-
binds the religious spirit now admittedly in bondage.
The same liberating spirit would operate amongst
authors, journalists, artists, and others. Not to idealise
the picture, we may agree that the more carnal appetites
would equally seek satisfaction. But we are not con-
cerned with the ethical aspect ; the point now to be
noted is that the non-producers, as defined here, would
be of greater social consideration than is their case to-day.
It is inconceivable to me that increased social con-
sideration should result in less remuneration or in
greater relative economic weakness. The abolition of
wagery would indeed be a delusion if it did not result
in an intensification of life-energy, with a corresponding
improvement in the status of all who minister to it.
But these appetitive occupations hardly come into
contact with the Guilds as such. They meet the
demands of the Guildsmen purely in their personal
and social relations. There is, however, yet another
category of non- producers, namely, all those whose
activities are covered by what will probably be known
as the Civil Guilds — teachers, doctors, administrators,
and the like. It will be more convenient to deal with
these when we consider that part of Mr. Bulley's letter
which refers to the State and the municipality.

II. Profiteering and Pay

If, as I hope, we have now got the non-producer
into focus, the way is clear to explore the possibility
of the Guilds degenerating into " profiteering societies."
And, if the foregoing analysis be approximately cor-
rect, it follows that the profiteering must be by Guilds
at the expense of Guilds. Mr. Bulley further assumes
that the several Guilds will have " interests opposed
to the other Guilds." If this be so, then our search

8 NATIONAL GUILDS AND THE STATE

for economic harmony is a failure ; the Guild snark
remains a boojum.

I am anxious to get at the substance of Mr. Bulley's
letter, and that leads me to think twice what he really
means by " profiteering." He doubtless knows that
the word springs from Guild sources — the Editor of
The New Age, in fact — and was meant to differentiate
Guild from capitalist practice. We know that the
capitalists (who grab a good thing when they see it)
captured the word, and tortured it to their own pur-
poses. Its original meaning was that in Guild philo-
sophy production for profit is anti-social. I think it
probable that Mr. Bulley has unthinkingly applied the
word in its vulgar meaning, and that what he means
is that the Guilds, having opposed interests, will apply
their economic power to forward their own particular
corporate interests. If I am right, then the inference
is that Mr. Bulley visualises the Guilds as soulless in-
dustrial bodies, and reads into their methods the
present spirit of capitalist production. In other words,
he forgets that the Guilds ex hypothesi are the logical
outcome of wage abolition.

Now what precisely is meant by that .■'

Wage abolition means that the proletarians, by
securing a monopoly of their labour, have determined
that they will no longer sell it at a commodity valua-
tion. The labour monopoly is obtained by the organi-
sation of the Guilds. But profit is only possible by the
power to buy labour as a commodity, and to sell the
product at a surplus value. If, however, labour has
already absorbed that surplus value, there remains no
possible margin for profit. And this applies as much
to the Guilds as to the capitalists — you cannot absorb
your profits and still retain them. It therefore follows
that when Mr. Bulley writes of " profiteering societies "
(and assuming that he understands the fundamental
argument), he really means the exaction by Guild eco-
nomic power of higher pay relative to the weaker Guilds.

PRODUCERS AND CONSUMERS 9

If this be all he means, he is forcing an open door. I
do not doubt that, in the first instance, those Guilds
dominated by the old craft unionists will secure advantages
in pay — pay, not wages, please observe. But neither
do I doubt that the tendency, observable even under
wagery, of all pay to approximate will be irresistible. In
this connection two comments may be made. " Skilled "
wages to-day are not reached by purely economic valua-
tion, but rather by their approach to labour monopoly
through the unions. Secondly, we have as yet no
criterion to indicate how a general labour monopoly
will operate. But the elemental necessities of the war
are disclosing some facts hitherto obscure, notably,
the economic value of the labour of agriculturists,
seamen, and transport workers. A new tradition in
regard to pay is rapidly being created ; its influence
will be felt long after the war has ended. We may
expect that it will expedite the movement towards a
common standard of pay.

It is possible that Mr. Bulley has it in mind that
the Guilds will only exchange their products after
reserving a surplus value. To what end .'' Provision
would properly be made for the next year's require-
ments in machinery, building, or what not, but this
would be done, not by reserve funds, but by agree-
ments and contracts with the producing Guilds con-
cerned. To what end then ? Since the Guilds are
only the owners of their labour monopoly, their assets
being vested in the State (or in the Guild Congress,
if a certain school prevail), no motive is disclosed for
exacting any surplus beyond a cost price agreed upon
by the Guilds, and, if necessary, arbitrated by the
Guild Congress. We must remember that these
Guilds are public bodies, and not close corporations ;
that upon their governing bodies there would be repre-
sentatives of the other Guilds, just as to-day inter-
locked public companies exchange directors.

Even if any Guild were so stupid as to play dog in

lo NATIONAL GUILDS AND THE STATE

the manger there would remain some tolerably strong
deterrents. First, we have the Guild Congress, whose
authority in many directions would be absolute. It
could, if necessary, order a boycott of the offending
Guild ; it could make representations to the State as
trustee, and in which is vested the charter. But we
must predicate some common sense and some states-
manship. Men would not become the leaders of such
gigantic organisations unless they possessed, if not
statesmanship, at least tact, discretion, and knowledge.

Nor can I perceive any divergence of purpose, any
" opposed " interests, between the Guilds. If I make
cotton goods I want machinery, coal, buildings,
labour. The existing " opposition " between me and
the producers of these commodities (including labour)
is that they want as much out of me as they can exact,
whilst I want their commodities at bottom prices. But
if the element of profit be eliminated, and I know that
these comimodities are at my disposal at cost price,
in what other way are our interests opposed .'' The
fundamental change envisaged in the Guilds is the
withdrawal of labour as a commodity, its recognition
as a function, and its consequent economic predominance.

It would seem then that Mr. Bulley's objections to
Guild theory melt away under examination. We find
that the non-producers, far from being prejudiced by
Guild organisation, benefit by it both socially and
materially. We find that, even if the non-producers
should suffer, it would not be due to the Guilds as such,
but to purely social causes. We fail to discover any
economic discord between the Guilds and, in conse-
quence, any sufficient motive for " profiteering,"
whether we interpret the word as profit-mongering or
more generally as the selfish corporate exercise of
economic power.

We have yet to consider the alleged inefficiency of
producers, the " rival principle " of Collectivism, the
function of the State generally and particularly whether

PRODUCERS AND CONSUMERS ii

it can claim in any pertinent sense to represent the
consumer.

III. Efficiency of the Producer

Before we come to the difficult question of the con-
sumer there is the problem, cited by Mr. Bulley, of the
alleged inefficiency of the producer. This he ascribes
to a natural conservatism on the part of the craftsman
and to a lack of discipline arising out of industrial de-
mocracy. A publication on the subject by the Fabian
Research Committee is called in aid. Mr. Bulley seems
to think that National Guildsmen positively welcome
inefficiency, and quotes the secretary of the National
Guilds League as " singing a paean in praise of ineffi-
ciency." I do not know the circumstances, but, accepting
Mr. Bulley's statement as correct, I surmise that Mr.
Mellor was probably emphasising the fact that there
are many elements in our problem of a much more
sacred character than efficiency. It is a god before
which many well-meaning people prostrate themselves.
The priest in " John Bull's Other Island," we may
remember, had something very pertinent and memorable
to say about English efficiency. Those who lay most
stress on it often forget that the present industrial
system is extraordinarily inefficient. Why, for example,
do the products of Oldham cost the consumers twice
as much as they do the producer ? Why have our
industrial leaders permitted such an army of purely
commercial vampires to fasten on production ? Prior
to the war, there were at least two million commercial
employes who, under an efficient industrial regime,
would have been set to productive work. If our em-
ployers have brought the exploitation of labour to a
fine art, they have proved their incompetence beyond
cavil by allowing themselves to be blackmailed by
railways, middlemen, money-lenders, and harpies to
an astonishing degree. It is no small part of the

12 NATIONAL GUILDS AND THE STATE

Guildsman's case that modern industry has developed
weaknesses and diseases that efFectually put it out of
court for any criticism on this score which it may make
of democratic control. In any event, if it be a choice
between industrial democracy and efficiency — an alter-
native I do not for a single instant admit — my unequivocal
choice is for Democracy. We may admit that Demo-
cracy must painfully acquire, by errors, disappoint-
ments and treacheries, a knowledge of its business ;
there is, nevertheless, no reason to doubt that it will,
in due season, become the efficient master of its own
affairs. Nor need it be too tedious a process, judging
by the mentality of the average successful business man.
I dogmatically assert that, whatever their degree of
democratic control, every previous experiment in pro-
letarian production throws absolutely no light upon the
present problem. No such experiment, however volu-
minously analysed, is required to prove that produc-
tion, within the ambit of the wage-system, must prove
a failure. Students may pile up the records to the
utmost limit ; the Fabians and other quidnuncs may
draw their bureaucratic or capitalistic deductions ; the
most they can do is to prove, what we already knew,
that wagery is not only nasty but cheap, not only de-
grading but inefficient. Nor does it help to be told
that these proletarians share in the profits or win a
wondrous bonus. It is altogether beside the point,
which is that the sale of labour as a commodity — the
wage-system — is a monstrous injustice, whether efficient
or inefficient ; that all deductions drawn from it,
as a guide to future Guilds, are misleading and mis-
chievous. On that issue there can be neither parley
nor compromise. Labour under the Guilds may commit
blunders of the first magnitude : may flounder in
industry as the Russian democracy is now floundering
in politics : so be it ; nevertheless we are not matching
the possibilities of future inefficiency with present
oppression and robbery.

PRODUCERS AND CONSUMERS 13

It is necessary always to stress this point. Mr.
Bulley, it will be observed, bases his case upon purely
utilitarian grounds. I do not shrink from the specu-
lative comparison of methods ; but the significant
omission in his letter of any reference to the funda-
mental principle of wage-abolition compels me to remind
him that Guildsmen have reached their conclusion,
not on the superficial question of efficiency, but on the
deeper issue of economic justice and emancipation.

With this reservation, we may now briefly consider
whether Guildsmen will be conservative in their methods
or fall short in a discipline incompatible with good
management.

What, we may ask, does Mr. Bulley mean by the
workers developing " a vested interest in the tools and
processes to which they are accustomed " .'' This may
be due to an innate conservatism, or it may be a natural
objection to a new machine or process which may throw
them upon the unemployed market, where they have
leisure to worship that god of the economist — the price-
less " mobility of labour." It is obvious that the
second alternative is inapplicable, because, whatever
the mechanical or scientific changes adopted by the
Guilds, they would not be obstructed by any fear of
unemployment. Once a Guildsman always a Guildsman
— he is " on the strength " for life. It is conceivable,
indeed probable, that a Guildsman would develop a
pride in his own workmanship and methods — it is
certainly our hope — but that very pride and tenacity
would, in an intelligent man, ultimately yield to the
more effective process. In my own business — that
of ideas — I am reluctant to change ; but when I find
the contrary argument irresistible (very seldom I am
glad to say 1), I yield and become a convert. In my
experience of engineering shops, both in England
and America, I have always found the worker keen
on new tools and interested in new processes. Nearly
always ; it is only when his living is threatened that the

14 NATIONAL GUILDS AND THE STATE

obstruction begins. And, of course, under the Guilds
there could be no " vested interest " ; such a thing would
be unthinkable.

For the moment I leave the matter here. I must
return to it later when I deal with a letter from a
craft-unionist, who raises the question of qualitative
production.

IV. Guild Discipline

The problem of industrial discipline, which looms
up in Mr. Bulley's mind as interference with the manage-
ment, is not so serious as it seems. But first let me
draw attention to a curious inconsistency. Mr. BuUey
pictures the Guilds as " profiteering societies," in an
early sentence, but later he pictures them as slack in
their methods, owing to indiscipline. It would seem
that if the Guilds are to be profiteering in character
and " armed with economic power," they cannot possibly
afford to be slack and undisciplined. Mr. Bulley
cannot have it both ways. The corporate impulse to
acquire economic power necessarily involves an indus-
trial discipline to secure the end in view. If this be so,
then Mr. Bulley's first contention effectually destroys
his second. Moreover, even if he be wrong in his first
contention, he is still out of court in his second, for —
right or wrong — he inferentially admits the power of
the Guilds to impose a discipline designed to meet
their industrial requirements. But we need not press
the point unduly against Mr. Bulley — to demonstrate
inconsistency is by no means to prove error — for it is
a simple fact that men united in a single purpose,
whether it be profiteering or quantitive or qualitative
production, or revolution, or church policy, or cricket
or football, can always impose the requisite discipline.
They can impose it by a prevaiHng and acceptable
spirit ; they can impose it by expulsion, or, in the last
resort, by resource to the nearest lamp-post. All of
which is implicit in a corporative society.

PRODUCERS AND CONSUMERS 15

But it by no means follows that Guild discipline
would be the same as, or similar to, capitalistic dis-
cipline. Let us devoutly hope not ! To-day, a work-
man who argues or disagrees with his foreman or
manager is in constant danger of dismissal. I have
known cases where the man was indubitably in the
right of it, yet was dismissed on grounds of discipline
— to encourage the others. Guildsmen, I doubt not,
would be vastly more concerned with the intrinsic
merits of the dispute than with the transitory dignity
of the foreman or manager. Disputes of this kind have
been largely instrumental in stimulating the demand
for workshop control. Consciously or unconsciously,
workmen are sensing the underlying truth that their
labour is a human element and not an inanimate com-
modity. And if it be a human, sentient thing, then
the workers, at their peril, even to interfering with the
management, must see to it tha!t it is put to the best
available uses. The day of the compulsorily silent
workman is dead. Whatever its value in the industrial
struggle, his right is now established to boo a goose or
damn a foreman.

V. Motive

Mr. Bulley may with reason retort that a motive to
efficiency and discipline can be discovered in profiteering
whilst it is not at present discoverable in Guild organisa-
tion. I agree that, unless there is a motive under
the Guilds, they are liable to collapse. But, first, it
is important to distinguish between efficiency and dis-
cipline. An inefficient manager may be a good dis-
ciplinarian and yet prove hopelessly incompetent in
the higher reaches of his work : may, in fact, cloak
his incompetence in a rigid discipline. The problem of
motive relates to efficiency, and only indirectly to dis-
cipline. Efficient workers are naturally disciplined ;
they hate disorder. But their sense of efficiency invari-
ably compels them to seek out and remedy the causes

1 6 NATIONAL GUILDS AND THE STATE

of discontent and disorder. In other words, discipline
Cometh not with observation ; it is the sequel to con-
tentment born out of competence and harmony.

Good leadership provides a motive, and sensibly
lets discipline take care of itself. The Fathers of the
Church learnt that lesson a thousand years ago. The
patriotic motive was invoked during the war to in-
duce all citizens to produce war munitions. They re-
sponded by hundreds of thousands, their most powerful
deterrent being the profiteers. There are, in fact,
many motives other than profiteering to make men
work. But I am assuming too much. What possible
motive is there under Capitalism to stimulate either
work or discipline .'' So far as I know, only these : the
immediate chance of selling one's labour, and so avoid-
ing charity or starvation ; the remote chance of join-
ing the capitalist class. Personally, I should say that
neither is particularly enticing. But wage-abolition
accomplished, the motive to produce spreads to the
whole working population, instead of being confined,
as it is to-day, to a small group of people, whose motive
is not primarily production, but exploitation for profit.
An obvious motive under the Guilds would be to retain
and preserve that profit or surplus value to be absorbed
into the life of the workers, instead of dissipated in
the maintenance of a society of shearers and shorn.
Statistically considered, this would represent an im-
provement of at least loo per cent in the present
standard of living. With such a prize in view, I am
content to wait for a democratic industrial discipline
that will show no mercy to shirkers and slackers.
" Content " is not quite the word ; I am a little afraid
of a harsh insistence upon purely material results.

The strictly economic consideration is to ensure that
value passes enhanced or undiminished from the raw
material to the moment of consumption, whether such
consumption be for subsequent production or for the
maintenance or amenity of life. Now, political economy

PRODUCERS AND CONSUMERS 17

is fundamentally a search for value. Most economic
works are theses ad hoc, the unconscious and sincere
defences of existing interests, the appreciation of value
largely conditioned by the medium in which they were
written. Nothing has so confused the economists as
the discords, evident and palpable, between the indus-
trial, commercial, and consuming classes. Bastiat, we
may remember, would have none of it. Yet any
amateur economist, with the labour commodity theory
exploded in his mind, can with the greatest ease tear
to pieces the " Harmonies." I do not doubt that the
liberation of labour from the commodity theory will
open out vast untrodden tracts for the discovery of
real value.

VI. Discords between Producer and Consumer

The next step is to inquire whether, under the
Guilds, there would be that economic discord between
producers and consumers predicated by Mr. Bulley
when he demands " the control of industry by the con-
sumers, in the shape of the State, the Municipality, or
the Co-op." The inclusion of the Co-op. surprises me.
Here is Mr. Bulley denouncing the Guilds as " pro-
fiteering societies," and in the next breath suggesting
the Co-op. If the Co-op. be not a " profiteering
society," what is it .'' Has Mr. Bulley never heard of
the " divi." } What is the dividend if it isn't profit .?
In its intention, and at its best, Co-operation is merely
an alleviation of the wage-payment. But I now dis-
cover that Mr. Bulley believes in the wage-system.
" Faced with this issue, it therefore seems to me that,
providing — an all-important consideration — the well-
being of the producers can be otherwise secured."
Otherwise ! Mr. Bulley's " otherwise " is the con-
tinuation of wagery under Collectivism.

At this point also, the logic of the argument calls
for the consideration of the issue raised by Mr. Jackson,

1 8 NATIONAL GUILDS AND THE STAIE

whether, in fact, the role of the State is to protect the
consumer against the producer. It is of considerable
importance, for upon its right solution depends the
future relations between the State and the Guild
Congress. I must devote my next chapter to it. To
clear the way for what immediately follows, I will simply
affirm my belief that the State, either now or under the
Guilds, has no definite or formal connection with the
consumer as such. Mr. Bulley states it as a dogma ;
it is a delusion. We will discuss, then, in the next
chapter, the alleged " opposition " between producer
and consumer, and whether the consumer will seek
protection through the appropriate Guild or look to
the State.

I think I have now examined all the issues so tersely
and clearly stated in Mr. Bulley's letter. He will
hardly expect me to discuss wagery under the Bureau-
cracy when he knows that I object to it in principle.
He will agree with me, I am sure, that wagery is wagery
whether under State Socialism or private capitalism.
Temporarily, at least, wage-conditions may be amelior-
ated by State Socialism — an improvement in degree but
not in principle. But there is this deadly objection :
State Socialism involves the secured continuance of
rent and interest, and so the more firmly and legally
rivets the chain that binds Labour to its commodity
valuation. Mr. Bulley must choose between the
Guilds with labour as a function, and State Socialism
with labour as a commodity. But when Labour awakes
to the falsity of the commodity theory, we may be sure
that it will grasp economic power through its labour
monopoly, and assume industrial partnership. Nor
will the State be able, without Labour's consent, to com-
pensate those who now exploit it through their control
of the labour market.

Nevertheless, much will remain for State action.
The Civil Guilds — the great spending corporations —
will be essentially State institutions and representing

PRODUCERS AND CONSUMERS 19

the State in the Guild Congress, in addition to its special
representation as Trustee and nominal owner of the
Guild assets. Perhaps Mr. Bulley was a little puzzled
at my caution in approaching, first, the definition of
non-producer, and, secondly, the definable difference
between economic and social demand. There is no
secret about it. I was preparing the way for a recog-
nition of that Social demand, which is the basis of the
Civil Guilds, of the Municipalities and of the State.
But whatever role the State may play in the Guild
Congress, or through the Civil Guilds, it will literally
have no concern with the consumers considered as a
special interest.

Addendum to Chapter I

I have received the following letter from Mr. J. H.
Matthews. It bears with such force upon the points
dealt with in this chapter that I cannot ignore it. I
draw the readers' particular attention to the writer's
remarks on stratification of control, to the sloth and
ignorance of the technical administrators (thousands
of similar instances have been brought to light by war-
pressure), and to the Shylock methods of the Costs
Department :

Your article in a recent number of The New Age has given
me an impulse to write you. It is about your answer to Mr.
Bulley re " the vested interests in tools and processes."

For more than a few years I was employed as a mechanic
(shipwright) in Portsmouth Dockyard, and it may or may not
interest you to know the attitude of the skilled workers of my
own and allied trades when working for a State-managed concern
which offered security of employment.

Ten years ago all light plate work — that is, the making of
cupboards, lockers, bins, shelves, bed berths, cabin lining, rifle
racks, ventilation trunks, was done entirely by hand. We went
to the field where the plates lay stacked, selected a suitable size,
marked it off, cut it out to shape with hammer and chisel, punched
the holes with a hand punch, did the necessary flanging, and then
riveted the whole thing again by hand.

20 NATIONAL GUILDS AND THE STATE

To-day each of these operations, except the marking off, is
done by machinery, awkward work, of course, being still done
in some part by hand. Piecework prices, a fair measure of the
increased efficiency, have been halved at least, with the earning
capacity measured in wages somewhat heightened, and the physical
strain very considerably lightened. This change has been wel-
comed. When the mechanic doing a particular job is allowed to
put his work through the machine himself, there is almost an
over-eagerness to use the machine and an endeavour to make it do
impossible things.

Reversion to handwork only occurs when machines are glutted
with work, in which case the pieceworker prefers slow progress
to no progress.

Another case. The use of pneumatic machines for riveting
and drilling is now general in shipwork. It now seems incon-
ceivable that work was ever accomplished without them.

Here, again, the semi-skilled riveter and driller welcomed the
machines, devised means of adapting them to difficult work, and
used them, when first introduced, even when, owing to the
mechanical crudity of the early machines, some physical discom-
fort was involved in their use. Periodically the men are driven
to prefer hand work to machine work because a zealous officialism
cuts machine piece-rates down to an impossible figure. My
experience is that machines and new contrivances are welcomed.
They are often scoifed at, but the scoifers cannot restrain their
interest in the " new toy."

So far as my own industry is concerned, what I have written
above is a true picture of the workers' attitude to machinery under
conditions which offer fair security of employment, as is the case
in Admiralty dockyards.

The people who restrict mechanical efficiency are the technical
administrators, who are too lazy or ignorant to gain a sufficient
knowledge of mechanical processes to enable them to provide a
mechanical equipment co-ordinated in detail to the work which
has to be turned out. Then, too, they will never maintain the
machinery in first-class condition, nor provide for continuous
adaptation to new demands. Then the costs department aims at
extracting the last farthing of additional surplus value created by
the use of the machine and to extort a few more by squeezing
the worker's level of subsistence.

Of these three forces restricting mechanical efficiency the
first is the result of control being stratified into grades, the second
mainly due to the supposed economy of grossly overworking

PRODUCERS AND CONSUMERS 21

two men as an alternative to employing three men and having
the pressure of w^ork occasionally belowf the normal, and the third
is an old friend which needs no diagnosis from me.

If I have bored you, please forgive me ; if the above informa-
tion is of any value, please take it as a modest offering to the
cause of National Guilds.

II

THE CONSUMER

But, as usual, these developments have emptied the baby out
with the bath, and imagined that the community can be super-
seded altogether by the Guilds, and Mr. Everybody the consumer
by Mr. Somebody the producer. — Mr. Bernard Shav7.

Is it not evident, therefore, that " rent " or prices will be fixed
by the same authority .? A joint Congress, equally representative
of the State, or the consumers, and the Guild Congress, or the
producers, is the body suggested for this office. — Mr. G. D. H.
Cole.

I. The Relation of Consumer to Producer

Mr. Bulley visualises the State as the natural pro-
tector of the consumer. I suspect that he has been
influenced by three reports of the Fabian Research
Department, the first on " Co-operative Production and
Profit Sharing," the second on " The Co-operative
Movement," the third on " State and Municipal Enter-
prise." The argument underlying these reports is
mainly this : that Associations of Producers have
failed, in part due to lack of discipline, and in part to
lack of capital. The conclusion reached, with certain
large reservations, is that, as an alternative to Capital-
ism, we must look to a Co-operative movement of
consumers, rather than to any association of producers.
" So far," we are told, " as the control of industry is
concerned, experience proves the Co-operative Move-
ment of Associations of Consumers to afford, so far

THE CONSUMER 2

as it goes, no less in manufacturing than in wholesal
and retail trading, a genuine and practical alternati-v
to the Capitalist system." The logic of the argi
ment inevitably leads to the control of the produce
by the consumer. Mr. Cole, a distinguished membe
both of the Labour Research Department, and of th
National Guilds League, aims at a balance of powe
between producer and consumer, objecting as muc
to the dominance of the one as the other. Whili
the Collectivist sees in the modern State the machinei
for securing control of production by the consume
Mr. Cole looks to Guild organisation to redress tl;
balance. But he agrees with the Collectivist that tt
State truly represents the consumer. I do not thin
it will be difficult to show that the Guilds represei
both producers and consumers ; that the basis of Guil
organisation is the control of every economic proces
productive and consumptive — its supreme raison d'etr
in fact ; that the State has quite other functions an
purposes.

On an issue so vital, involving ex hypothesi a bicamer
government, it is remarkable that no attempt has bee
made to define consumption or delimit the role of tl
consumer. Mr. Cole is conscious of this grave omissio:
In his last book, which every student of these problen
ought promptly to procure,^ he draws some distinctions
" The municipal council represents the individuals wl
inhabit the city as ' users ' or ' enjoyers ' in commo:
and is qualified to legislate on matters of ' use ' (
' enjoyment.' " But a few paragraphs later, he assigi
the generic term of consumer to users and enjoyers
" The State, on the other hand, we have decided
regard as an association of ' users ' or ' enjoyers,' <
' consumers ' in the common phrase." It would, ther
fore, seem that the term " consumer " covers both efFec
ive demand and ordinary citizenship. To do thi
however, is to rob the word of any specific meanin

* Self-Go-vernment in Industry. By G. D. H. Cole. (London: Bell. 5s.)

24 NATIONAL GUILDS AND THE STATE

If I walk in the public park, maintained out of the rates,
I am, presumably, an " enjoyer " ; but it is difficult
to see what community of interest I have on that account
with my neighbour who buys a bottle of whiskey. If
he should have a grievance against his spirit merchant,
he can hardly approach me to help him to remove it,
on the score that we are both consumers, he of whiskey
and I of the public park. I may detest his whiskey-
drinking propensities : may desire the price of whiskey
to be doubled, or the stuff prohibited altogether. In
this regard, my neighbour and I have nothing in common ;
it is, therefore, impossible to consider myself as belonging
to an " association," namely, the State, which can by
any stretch of imagination be deemed to represent us.
But my neighbour may smoke my brand of tobacco,
and we may jointly desire to rectify our relations with
the tobacconist. Our community of interest is not
that I am a municipal enjoyer, and he a tobacco con-
sumer ; we fight on the issue that we both are more
or less devotees of tobacco. But there is a large army
of non-smokers — probably the majority of the com-
munity — whose attitude to tobacco may be similar to
mine to whiskey. The State can only act on grounds
of public policy, which would obviously embrace both
producer and consumer. It cannot make flesh of one and
fowl of the other. Some mode of redress, other than State
intervention, must therefore be found. We have heard
of sand in the machinery ; the proposal to make the State
the protagonist of the consumer, thus generically con-
sidered, as against the producer, is to choke the whole
machine with sand, not in grains but by the ton.

We must seek a more precise definition of consumer.

II. Definition of Consumer

It may be true, but in a sense so broad as to lose any
definite significance, that I am a consumer when I
walk through the public park, visit the Art Gallery, or

THE CONSUMER 25

resort to any municipal convenience. Labour has gone
into the construction of these utilities, and has been
paid for by moneys out of the National Exchequer
or the rates. But it is surely evident that all these
activities are in a different category from the ordinary
production and consumption of commodities. It is, in
fact, a category of public policy, aiming to raise my
status, not as a producer or consumer, but as a citizen.
No question here arises between producer and consumer,
even though, incidentally, producers are employed. In
the pursuit of this policy, the State or Municipality,
neither in intention nor fact, acts as representative
of the consumers as such. It is fulfillin^its real function,
the enhancement of citizenship. Unless, therefore, the
term " citizen " is to be stripped of its spiritual connota-
tion, and so blunted down as to be interchangeable with
the word " consumer," we shall find ourselves in a
morass of fatal misunderstanding, not only in regard to
the particular problem now confronting us, but the
larger issue as to what constitutes the State.

We shall, I think, find it more accurate, and cer-
tainly more convenient, to define the consumer as one
who in his functional capacity makes an effective demand
upon the producer. My whiskey-drinking neighbour
makes an effective (though not necessarily an economic)
claim upon the publican, my tobacco-smoking neighbour
plays the same role in regard to the tobacconist, our
several wives descend upon the grocers, drapers, milliners,
chemists, with their varying demands to purchase
commodities for their market values — subsequently,
under the Guilds, for their equivalent values. Subject
to an important reservation, about to be discussed, all
these belong to the class of final consumers.

Equally germane to our inquiry is the class of
intermediate consumers — those who consume to produce
again. The coal now burning in my grate, I bought as
a final consumer. But the vast bulk of coal brought to
the surface is bought by intermediate consumers for

2 6 NATIONAL GUILDS AND THE STATE

purposes of manufacture. Although we both make an
effective demand upon the colliery, we are not in the
same category of consumers, nor are our interests
identical — a disagreeable fact now acutely realised in
Berlin. 1 We may remember that the same distinction
was grasped both by Free Traders and Tariff Reformers
in those distant days before the war. As I am not
writing an economic treatise, let me reduce the issue to
Guild terms. It is evident that a manufacturing Guild,
making effective demand upon the Miners' Guild, would
know how to arrange matters, probably appealing to the
Guild Congress as arbitrator in case of dispute. I
assume that neither Mr. Shaw nor Mr. Cole would
regard the State as in any sense the representative of
the manufacturing Guilds against the Miners. I
imagine that if it intervened, it would meet with a chilly
reception from both parties to the suit. Yet, any decision
reached by the Guild Congress might affect me as a final
consumer. But under Guild organisation, I must have
obtained my coal from some Guild, either direct from the
Miners, by arrangement with the Transit Guild, or
through a definitely organised Distributive Guild. This
latter seems to be the solution, and the practical question
arises whether the Co-operative Movement can be
organised and adapted to that end.

If my definition of consumer be accurate, it would
logically follow that the contentious issues between pro-
ducers and consumers as such (and apart from public
policy, when other social factors enter) would range
round price, quality, and variety. Negotiations on such
points could best be decided between the Distributive
Guild and the manufacturing Guilds concerned. In this
connection, I will add that the producer must be master
of his craft, subject only to the formulation of certain
fundamental principles vaguely adumbrated in the law
of restraint of trade.

In the event of an insoluble dispute between the

^ November 19 17.

THE CONSUMER 27

Guilds, when the Guild Congress has exhausted all its
resources, certain speculative questions must be asked.
What would be the locus standi of the judiciary ?
Where, ultimately, would the sovereign authority reside ?

III. Capitalism and Consumption

We now see that there are consumers and consumers,
constituting no definite class as such, having few, if
any, interests in common, integrated neither vertically
nor horizontally. A concourse of unrelated atoms — a
slender foundation upon which to build a social theory.
I know of no social or economic issue which would
differentiate producers, as such, from consumers, as such
— not even remotely. The posing of the problem as
between the State, representing the consumers, and the
Guilds, representing the producers, is the sequel to the
misapplied activities of the Fabian Research Deijartment,
who spent enviable skill and ingenuity on a laborious
investigation — and forgot to define their terms. The
unhappy result is that they have confused the citizen
with the consumer, rendering their meaning unintelligible
and robbing the citizen of his spiritual heritage.

Vital to our inquiry is the right solution to the
question whether, having regard to the commodity
theory of labour, the wage-earners' consumption is to be
classed as final or intermediate. Is the consumption
necessary to maintain the labour commodity on all fours
with the consumption of the millionaire .'' Does it differ
only in degree or in substance .? Is there any economic
distinction between the consumptive demand of the
active and passive citizen }

Mr. W. Anderson, in one of the most closely knit
arguments yet produced by the Guild school of thought,^
has, I think, proved beyond reasonable doubt that, under
the present system, the capitalist is the actual protagonist
of the consumer, so far as it is possible to define it.

» Some Class Ideahgies. W. Anderson. [The Neiv Age, February 22, 19 17.)

28 NATIONAL GUILDS AND THE STATE

Indeed, it must be so : for the ultimate purpose of
exploitation is to consume far in excess of the individual
production. That is why capitalists and employers say
that they are not in business for their health ; that
whatever they may choose to be in private they are not
philanthropists in the counting-house ; that business is
business ; and all the other commercial maxims that so
mercilessly uncover their morality. But the foundation
of all exploitation is to control the labour commodity,
together with the raw material, by the ordinary market
mechanism linked up with supply and demand. We
now know that the upkeep of the labour commodity is
precisely measured by the cost of sustenance, known as
wages. The conclusion is irresistible : wages being the
amount consumed on the maintenance of labour, which
goes into production, is an intermediate form of con-
sumption, none the less so because the wage-earner
himself makes the demand on the distributor. If I give
a man money to buy a suit of clothes, it is I who originate
the effective demand on the clothier. The two trans-
actions are analogous.

The distinction between capitalist and proletarian
consumption is clearly, if unconsciously, brought out in
the Report of the Commissioners into Industrial Unrest
in the Yorkshire Area. " It became unnecessary to ask
each witness to state in detail many of their points, it
being found that in every case, from every district and
class, the primary causes were asserted as being relative
to the common domestic difficulties and actual privations
following upon the high price of food and the necessary
commodities of life with, in many cases, the utter
inadequacy of wages, even though higher than the
pre-war rates, to secure the hare essentials for living at a
much lower standard of comfort than was considered essential
in their homes before the war" Here we have the suste-
nance theory in all its ugliness. Mr. Mallon, one of the
Commissioners, and himself an elected member of the
Fabian Research Department, makes a proposal, not

THE CONSUMER 29

endorsed by his colleagues. It is in such rich contrast
with the sustenance theory that it deserves record. " To
satisfy the feeling prevalent among the wage -earning
classes for more drastic demands on the rich, which
is usually expressed by the phrase ' conscription of
wealth,' the income-tax should be carefully reviewed
and substantially increased as regards those incomes which
are capable of curtailment without any real loss to the
amenities of life" ^

To the one, sustenance ; to the other, amenity.

I invite the Fabian Research Department to reconcile
the fundamental differences between these two classes of
consumers. How can the State represent both .'' How
can it remedy the injustice of the one client without
damnifying the other .-' The State cannot do it ; it is
an economic problem for the Guilds.

Nevertheless, after wage-abolition, we must provide,
inside the Guild organisation, for effectual contact between
the Guilds and the final consumer.

IV. Final Consumption

The fact that the maintenance of labour by wages is
a productive process, falling into the category of inter-
mediate consumption (based on the assumption that
labour eats to work and only incidentally to live), is
peculiarly important in that it leaves final consumption
to the possessing classes, who control production to their
own consumptive purposes. Postulating the continuance
of wagery, it follows that to constitute the State the
representative of the consumers is to make it the repre-
sentative of the capitalists. Mr. Cole does not mean
this, because he rejects wagery and visualises the consumer
as he may be after wage-abolition. But when Mr. Shaw
writes of " Mr. Everybody the consumer," he fails to
grasp the real meaning of the wage-relation, and his
criticism of Guild theory in consequence misses the

1 Cd. 8664. Price I8. net.

30 NATIONAL GUILDS AND THE STATE

mark. I have elsewhere described the possessing and
wage-earning classes as " active " and " passive " citizens.
We now see that they can also be distinguished by the
economic control of consumption, which belongs entirely
to the possessing or active citizen. The Fabian Research
Department, in its Report on The Co-operative Move-
ment, comments upon the " apathy and indifference of
the bulk of the membership of the British Co-operative
Societies." Deprecating this unhappy state of affairs, it
grows hortatory : " It is the business of Co-operative
Statesmen, as it is of Trade Union, Municipal and
National Statesmen, to devise means of transmuting this
all too common passive citizenship into effective citizen-
ship." With our analysis of wagery before them, it is
unfortunate that the Fabian Researchers did not inform
their readers that the transition from passive to active
citizenship is only possible by the destruction of the
existing wage relationship, with its corollary the control of
■production by the producer instead of the consumer, who can
only be the capitalist. If we seek further proof, it will be
found in the simple fact that production and consumption
are not two separate and unrelated processes but the
complementary stages of one economic transaction.
Whatever its subsidiary effects, it is the capitalist who
controls that transaction as a whole, naturally directing
its main current to his own interest and amenity. " Mr.
Everybody the consumer " is found, on examination, to
be really " Mr. Somebody," and at best a very small part
of the population.

Under the industrial system, with the maintenance of
labour a productive charge, we need waste no sympathy
upon the capitalist in his role of final consumer. No
Guildsman would dream of putting the State in loco
parentis to him. When Mr. Cole writes of the State as
representing the consumer, he of course means after
wage-abolition, when the passive has been transmuted
into the active citizen, and has become a final consumer.
" We have concluded, then, that the only way in which

THE CONSUMER 31

industry must be organised in the interests of the whole
community is by a system in which the right of the
producer to control production and that of the consumer
to control consumption are recognised and established." ^
But it is necessary to inquire more closely into the true
relation of the consumer to the producer. Mr. Cole
assumes {a) that production and consumption are two
different processes differently controlled, and (b) that
there is an equality between the two, represented respect-
ively by the Guild Congress and the State. We may
agree that they are different processes, but I find it
impossible economically to differentiate them. Subject
to higher considerations, to which I am coming, the
product is surely the result of co-operation between
producer and consumer. Nor do the interests of the
two diverge at any point unless the element of profit
enters. But as that disappears ex hypothesi from the
Guild system, it is difficult to see why producer and
consumer should look to widely different organisations
to express their desires. The implied antagonism
between producer and consumer, which is more apparent
than real, is not economic but commercial. What, we
may reasonably inquire, is the producer for if not to
satisfy within reason the requirements of the consumer }
To pose them as two different economic interests is to
assume the perpetuation of the commercial spirit in an
organisation deliberately designed to kill it. But we
may safely go further : we may declare that the producer
is par excellence the consumer.

It is only in so far as the producer, by instinct or
understanding, enters into the mind of the consumer that
he can produce at all. This is, I believe, the psycho-
logical explanation of the well-tested maxim that the
supply creates the demand. When a certain Mr. Bissell
constructed the first carpet-sweeper, he was not only a
producer ; in imagination he was himself the consumer
of his own product. I dare say he swept a million

1 Self-Govsmment in Indusiry, p. 281.

32 NATIONAL GUILDS AND THE STATE

carpets and consumed ten thousand of his own sweepers,
as he lay in bed pondering the possibilities of his inven-
tion. Nor subsequently did the actual consumers invade
his works, angrily demanding improvements. On the
contrary, he added one improvement to another, because
he could only be a successful producer to precisely the
extent that he was a competent consumer. Nor did he
stop with his invention. He spent untold thousands of
dollars begging the consumer to take his product.
There is no misconception so universal as that the
consumer creates the demand. He never does and never
will, until he himself becomes the producer. But it is
not necessary to push the argument so far as that : it
suffices if we prove that the productive and consumptive
processes are too intimately interrelated to warrant their
separation by an arbitrary assignment to a non-economic
State of the consumers' alleged interest.

In any event, when I come to consider the case of
the producer as such, I shall contend that as between
him and the consumer his must be the final word ;
whilst, as between the producer and the citizen, the
citizen must decide and speak the final word through
the State. The State, whatever its ultimate form, must
be the expression of the life of the citizen community.

Ill

THE PRODUCER

As a general rule, the improvement of our goods has constant
attention on the part of the responsible managers of our productive
works. From time to time we get suggestions from individuals,
which we are always willing and ready to take advantage of As
regards the supply creating the demand, we may say that, as a
rule, the well-known excellence and quality of our productions
creates the demand, but this is also assisted by the fact that the
consumer, through his membership with the retail Society, has a
direct financial interest in the productions of the Society. — Mr.
T. Brodrick, Secretary of the Co-operative Wholesale Society,
in Letter to the Writer.

Mr. Hobson is not opposed to the " big industry " of modern
times : he demands no complete break with the substance of
industrial production, but only with the method of it. . . . If the
Guild is to be the enormous concern that its supporters outline,
containing perhaps a million members, its direction and adminis-
tration will be as remote from John Smith, machine-minder, as
is the Government of the Empire from John Smith, of Waltham-
stow, voter. With size will come centralisation ; with cen-
tralisation, death. — Nation, August 4, 19 17.

What is pretty certain is that if National Guilds could be set
up, trade unions would, after no long interval, arise within them
to defend the special interests of the worker ( ? craftsmen) as
against the general interests of the industry. — " H," in the Man-
chester Guardian, October 6, 191 7.

I have read your articles appearing in The New Age on
National Guilds. You have evidently got the conviction that
Society is sick, and accordingly you prescribe, and I notice also
that you are willing to bring in a htde medical treatment. The
medicine appears to be strange to the major portion of Society.

33 D

34 NATIONAL GUILDS AND THE STATE

I have, however, tasted it, and it isn't really bad. Before taking
the full dose recommended, I should like to be satisfied on one
point. I take it that you recommend that each industry should
come under a National Guild ; but what happens in that case
to the particular craftsman in the industry ?

Personally, I am an engineer, and say with a little pride that
I am a fully qualified millwright. I have a pride in my craft,
and am afraid of any scheme which would tend to lower the crafts-
man's pride. Speaking as an Englishman, or Briton if you prefer
it, I claim that it is this pride in craft which has brought my country
into the foremost place in the world's markets, and I shall be glad
of an article from your pen dealing with this subject, not losing
sight of the fact that it is the quality of our national products which
alone can retain to us the pre-eminent position we now hold. This
position cannot be held without pride of craft, therefore what
becomes of each particular craftsman's union in any industry ? —
Mr. Joseph E. Ambler, in Letter to the Writer.

I. Perverted Terms

In its devouring blight, commercialism has tortured
from their natural meaning nearly all the old industrial
terms. Amongst them the word " producer," the plain
meaning of which is one who produces, who makes.
But the men and women who produce are no longer the
producers ; they sell only their labour ; the product of
their labour belongs to the entrepreneur, who arrogates
to himself the word " producer." The wage-earner not
only forfeits his claim to the product by selling his labour
as a commodity, he is helpless when his financial master
usurps his title also. Thus, if with ;^rooo I buy a
bootmaking business, ipso facto I become a bootmaker,
even though I do not know the welt from the toe-cap.
I " produce " boots precisely as the conjurer " produces "
a rabbit from a silk hat. If one of my employees should
object to my usurpation of his title, I merely inquire
whether he or I owns the business. My retort would be
held by all business men to be crushing. And I could
still further crush him by dismissing him, whereby his
presumptuous claim to the tide, which I had bought in

THE PRODUCER 35

the open market, like the title attached to a French estate,
would be at least temporarily disposed of. It is the
capitalist, in the guise of producer, who is really referred
to in fiscal discussions respecting producer and consumer.
I have even seen the phrase, " producers and their hands."
These verbal distinctions may seem trivial ; far from it,
they betray in a flash how far commercialism has carried
us from reality — a distance which must be promptly
shortened, and soon obliterated, if the Commonwealth is
to recover its economic strength.

In the previous chapter we saw that the wage-earner,
by reason of his divorce from the product, is necessarily
in the class of intermediate consumers ; we now see
that, for the same reason, he is not, in fact, the producer,
but merely a factor in production. When he resumes
control over production, by achieving partnership, he
becomes in very deed not only the producer, with all
the consequences attached to that change of status, but
the final consumer. He passes from " passive " to
" active " citizenship.

II. Craftsmanship

The submerging of the craftsman in the processes
of manufacture, the threatened danger that the death of
the spirit and tradition of craftsmanship might ensue,
inevitably led to indignant protests both from the
aesthetics and those who reaHsed that Great Britain's
true metier in the world's economy was qualitative rather
than quantitative production. I owe to William Morris,
Walter Crane, and Matthew Arnold whatever dim
perceptions I may possess of the spiritual value of
craftsmanship as an expression of our inherent, if sleeping,
sense of beauty. In my youth I happened to be con-
cerned with trade in wallpapers. Walter Crane designed
wallpaper patterns, William Morris designed and printed
wallpapers. I can never forget a little lecture William
Morris gave me, as he sat and smoked In his workroom

36 NATIONAL GUILDS AND THE STATE

in Kelmscott House, on the widely different approach to
that particular occupation of the craftsman from the
trader. The difference lay not alone in quality, but also
in the gay spirit and buoyant freedom in which the
craftsman set to work. I mentioned that, whereas the
usual discount was 33 J per cent, he only gave 5 per cent.
" If the merchant wants wallpapers at usury let him
make them," he said. By good fortune, WilHam Morris
was in its full sense a master-craftsman ; it is an obliga-
tion upon all of us to free the less favoured craftsman
from a servitude that kills beauty and starves genius.

The argument for qualitative production, whilst
doubtless rooted in the aesthetic sense, is based on more
practical and immediate considerations. The cry for
qualitative production is a condemnation of shoddy
production ; a declaration that the production of flimsy
commodities, made merely to sell, is uneconomic and
morally degrading. It can be argued with almost equal
force in the sphere of ethics or of economics. Mr.
Ambler, whose letter I quote, is a millwright ; he belongs
to the most highly skilled branch of mechanical engineer-
ing. He claims to be a craftsman — a claim I for one
most readily admit. But it is doubtful if the aesthetes
would agree. Some of them might regard him as the
most dangerous of Philistines, as a man whose diabolical
genius for mechanical production cuts at the roots of true
craftsmanship. My correspondent's function is to build
a machine, honestly made in every part, that will perform
efficiently the work for which it is designed. This
machine may be the main instrument in making some
commodity at a price within the reach of the consumer's
purse — an article which is the outcome of prior co-opera-
tion and negotiation between producer and consumer.
It may be that the consumer would prefer this commodity
to be more distinctively the work of a craftsman, who
would put into it a personality not so visible, although
not actually missing, in the machine-made product.
For example, I have on occasion at craft exhibitions seen

THE PRODUCER 37

various pieces of furniture made by Mr. Romney Green,
I have paid them devout homage and wished them mine.
At a pinch, I might possibly have procured one of Mr.
Green's productions. Apart from the fact that it would
make the rest of my furniture look cheap and ugly, I
must remember that I have a limited surplus over my
domestic requirements, and I might prefer to spend it
on books or pictures, on scientific research, or what not.
I would accordingly be thrown back upon the purchase
of a table made by machinery constructed by Mr.
Ambler. But I would naturally expect that table to
be of good quality and endurance. It must meet the
requirements for which it was designed and sold. If it
did so, it would come within the qualitative standard.
And if so, its manufacture may properly obey the
economic laws incidental to " large scale " production.
And providing the quality be maintained, I see no
reason why the engineers concerned should not be
regarded as craftsmen, nor why they should suffer any
moral deterioration.^

Large production being historically modern, it was
not surprising that the craftsmen pur sang should hark
back to mediaeval days in general and the mediaeval
Guilds in particular. They demanded the restoration
of the Guilds, finding themselves out of sympathy with
modern movements, whether Collectivism or National
Guilds.

The restoration of the mediasval Guilds is as impos-
sible as the revival of Egyptian, Greek, or Roman
civilisation. If there were the least chance of such an
adventure proving successful, I would oppose it with all
my strength, not least in the interests of the craftsman
himself. In their integration and final structure National
Guilds have nothing in common with their mediaeval
predecessors. What they have in common is a spirit
of craftsmanship with more leisurely methods in produc-

1 The argument for large scale production is admirably stated by Mr. Cole in Self-
Go-vernment in Industry, p. 24.0 et uq.

38 NATIONAL GUILDS AND THE STATE

tion. But we must not idealise the conditions obtaining
in the mediaeval Guilds. Were they the patterns of a
rich and happy existence they are sometimes painted,
we may rest assured they would not have succumbed so
easily to the merchants and financiers. The contrasts so
frequently drawn between the mediaeval and the modern,
always to the disadvantage of the modern, seem to me to
ignore the historic justification for the advent and growth
of capitalism. New economic or social developments do
not spring out of the blue, they are the offspring of
preceding conditions, the harvest of yesterday's seed.
Their history, imperfect and biased though it be, is for
guidance into the future, and not for reversion to the
past. For my part, I can rejoice in the Renaissance,
learn from the Reformation, feel some thrill from the
Elizabethan expansion, find enrichment in the Common-
wealth and amusement from the Restoration. But
should it come to the revival of these periods, or any
of their social and economic conditions, I emphatically
dissent, choosing the future and rejecting the past. Our
ancestors did many remarkable things ; so also can we.
Now, as then, in the womb of each morning is a miracle ;
before the sun sets we may witness its birth and share in
its glory. Capitalism bore in its train unspeakable horrors,
notably the industrial conditions of the transition from
the small to the large industry, but it was a dominant
factor in a period of great and continuous achievement.
Its mission is now exhausted, its work completed ; we
are moving into a new era of industrial democracy, in
which function supplants exploitation and partnership
ends servitude.

III. Art and Local Life

The aesthetic or sensuous aspect of art and craftsman-
ship, as distinct from the admiration we feel for competent
craftsmanship in machine production, is linked to the
problem of local life and the reaction of locality against

THE PRODUCER 39

centralisation. Obviously the craftsman's art depends in
part upon the organisation of local citizenship and in
part upon the purchasing capacity of the Guildsmen.
All this congeries of questions can be more conveniently
considered in our next chapter on distribution. I look
anxiously for the growth of local life as a necessary
counterpoise to centralisation. The conditions that induce
centralisation by no means exclude local patriotism, a
favourite theme of Socialists a quarter of a century ago.
But so far as I can see, centralisation is only in its
infancy. At present it does not extend beyond the
national frontiers. Democracy must, however, within
a measurable period assert itself in industry in other
countries. When that time comes we shall superimpose
upon the national an international centralisation, whose
only limits will be the surface of the globe.

IV. Qualitative Production

Our immediate tjask is to reconcile the present large
scale industry with qualitative production. What pre-
cisely is meant by large scale production ? Mainly this :
when the economic unit is found in the largest output,
at the lowest cost, under single control. Not invariably,
however ; large production is sometimes essential to a
single product. A small firm may throw a light bridge
over a broad river ; it requires a large corporation, with
practically unlimited resources, to build a great modern
bridge, capable of bearing a number of railway trains,
vehicles, and foot passengers. There is nothing
inherently wrong or morally degrading in large pro-
duction. On the contrary, it may save and not waste
monotonous labour ; it may, and in fact does, reduce
or abolish human " repetition " by the lavish intro-
duction of automatic machinery. In many directions
we must admit that its effects are beneficial. The large
scale production of agricultural machinery, for example,
has been instrumental in increasing the supply of food-

40 NATIONAL GUILDS AND THE STATE

stuffs, even though the methods of sale to the farmer
are usurious and tyrannical. The cycle carrying that
typist to her work is the outcome of large scale production,
not only as an industry in itself, but as a dependent
of large scale machine tool production. The term, too,
is relative. The dentist (direct descendant of the barber
who extracted teeth in the days of the mediaeval Guilds)
has tools and materials at his disposal that come from
large scale producers, even though their total output be
the merest bagatelle compared with a Chicago canning
factory. The list might be indefinitely lengthened.

Nevertheless, we know that craftsmanship is in per-
petual danger and the craftsman in constant servitude.

The danger and the servitude are not necessarily
inherent in large production ; we know as a fact that
small employment may be equally repugnant to the life
of the craftsman. We must look to the conditions of
the workshop, the terms of employment, and the training
of the apprentice, in addition to the degradation of the
wage payment. It would be easy to particularise on
each of these points ; indeed, volumes have been written
upon them, from Upton Sinclair's Jungle to the latest
dissertations on scientific management and welfare
work.

The solution can only be found in one direction, and
that the most natural : in the control of the workshop
by the workman himself. With that end attained, he
will know from bitter experience how most efficiently
to train the apprentice and how most humanely, and
therefore most fruitfully, to order, to change, or to
abolish the workshop routine. When the craftsman
reaches that stage, he will be in a position to refuse to
produce commodities whose poor quality offends his
self-respect ; he will indignantly reject any and every
form of adulteration. Whatever he produces will be
carefully calculated and even guaranteed to be the
requisite standard and quality.

The ground is now, I hope, cleared to consider the

THE PRODUCER 41

status of the producer in his relations with the State
and the consumer.

V. Industrial Craftsmanship

Confining ourselves in this section to the industrial as
distinct from the art craftsman, the question still remains
to be answered how would the craftsman protect his
particular craft and mystery inside the Guild organisa-
tion ? This is the essential point of Mr. Ambler's
letter, and I think also of a very interesting critique,
quoted earlier, in the Manchester Guardian, by " H,"
whom I suspect to be Professor Hobhouse.

The question presupposes two different classes of
producers — the skilled and unskilled. The former may
be presumed to be the trade craftsman ; the latter the
labourer. But the distinction is not so easy as it looks.
For a generation or more the skilled workman, so-called,
has really been the organised workman. Generally
stated, skill and organisation have been coincident ; but
it does not follow that inadequate organisation spells
lack of craftsmanship. The classic instance is the
agricultural labourer, whose skill cannot be in serious
dispute. The war has brought his skill and national
value into bold relief. In like manner, we have suddenly
discovered the functional value of the sailor. Whilst it
is true that the mechanism of steam and electric power
has enabled shipowners to dispense to a large extent
with the weather-wisdom and sailing qualities of the
old-time sailor, whilst captains and mates can now secure
their " tickets " without the previously necessary training
in sailing ships, it yet remains true that the best captains
are they who have learnt their trade literally " before the
mast," and the best seamen are they who have acquired
their skill, alertness, and keen observation in " wind-
jammers." But hitherto both the agricultural labourer
and the seaman have been criminally underpaid, because
inadequately organised. It is not without significance

42 NATIONAL GUILDS AND THE STATE

that one of the most powerful craft organisations in
existence is the Merchant Service Guild, composed
entirely of captains and officers of the mercantile marine.
It was this organisation that laid up the P. 8z; O. boats
until its terms were accepted. Had there been a strong
agricultural union, as powerful on the land as is the
Amalgamated Society of Engineers in the engineering
shops, the history of the " release " of men to the army
from " industries of national importance " would have
been vastly different from the blundering jumble it
became. Amongst the thousand and one lessons we
have learnt from the war, not the least is the national
importance (apart from its sectional value) of trade
organisation and the authority it confers. Priceless in
war, it will prove infinitely precious in the settlement and
in the succeeding peace.

There cannot, I hope, be two opinions as to the
necessity of preserving and refining the crafts both of
agriculture and seamanship. But our difficulties do not
end with these two crafts. The war has expedited the
tendency, already constituting a problem in those far-
off days of peace, to break down the barriers between
the " skilled " and " semi-skilled," particularly in the
engineering industries. " Repetition " has been crowned
with a halo of patriotism and automatic machinery has
received the blessing of the Church and the plaudits
of our governing classes. The consequent " dilution "
has become a stupendous fact in industry, not only
because spinners and weavers became engineering
war-workers (incidentally earning double and treble
wages), but women invaded the engineering shops
in hundreds of thousands. In one large works known
to me, of 7000 employed 65 per cent were women.
These women were not merely engaged on shells ; they
were working 5-9 and 9-2 guns. To add to the con-
fusion, " repetition " wages exceeded " skilled " wages,
with the result _ that skilled men were drawn from
their proper occupations to the more highly paid but

THE PRODUCER 43 -

much less skilled work. It is an open secret that recently,
when " leaving-certificates " were withdrawn, there was
considerable anxiety that the craft jobs would be deserted
for the attractive " repetition " wages. To obviate the
danger, more liberal wages were offered to the " skilled "
men, who had resolutely insisted upon the time-basis of
payment. From the other side, the Amalgamated
Society of Engineers has opened its doors to certain
grades of semi-skilled workmen, to the chagrin of the
old-fashioned craft-unionists.

Through the eyes of the selfish craftsman the damage
seems irremediable ; but insult has yet to be added to
injury by the employers, who, unless they can be
restrained, intend to maintain this great army of semi-
skilled in a mad gamble of world-competition in purely
quantitative production. Now that the war is over,
we find ourselves faced with a mountainous national
debt. It is already argued, both by the Government and
the employers^ that the only possible way to meet our
national obligations will be by a gigantic commercial
crusade, the one and only consideration being large
profits, out of which the debt-interest and sinking funds
must be paid. An informed and alert Labour party
must answer, both by deeds and argument, that wealth
conscription is the way to pay the debt and that qualitative
production is the only way to preserve our self-respect
and create a sane economy. Quantitative production, in
the conditions envisaged, spells the indefinite prolonga-
tion of wagery and the final degradation of the
craftsman.

VI. Craft Groups

We cannot be too cautious in drawing conclusions
from such incongruous conditions ; it would be safer
indeed to draw none. War prophecies are, after all, only
the transitory hopes or fears of the moment. It is better
to fall back upon first principles. The condition pre-

44 NATIONAL GUILDS AND THE STATE

cedent to National Guilds is the labour monopoly. This
monopoly, of course, includes every grade of labour
from the simplest to the most complex. Labourer and
craftsman meet here on common ground ; each is vitally
concerned to preserve the labour monopoly, to keep
his organisation " blackleg -proof." This numerical
monopoly obviously includes the control of all the
crafts within its boundaries. Since the end in view is
qualitative production, it follows that the development of
every craft is imperative. Nor does it seem unreasonable
to assume that the responsibility for maintaining and
developing the craft properly falls on those who have
already acquired it.

The narrow craftsman takes the selfish view that the
increased industrial power of the semi-skilled is an
invasion of his own prescriptive rights, bought and paid
for by premium, apprenticeship, and other special training.
In a competitive wage-market, there is something to be
urged for this point of view : it is essentially a property
right, which, if destroyed, threatens other property
rights. If, for example, the employers overwhelm the
craftsmen by a combination of semi-skilled labour and
automatic machinery, they cannot complain if the
craftsmen, in their turn, combine with the semi-skilled
and unskilled and so oust the employer, whose powers
of exploitation are thus rendered nugatory. And that
is practically what has happened. Up to a point, the
employers have been careful not to antagonise the crafts-
men ; more than once, they have played off the craftsmen
against the semi- and unskilled. It is the simple truth
that the craft-unions, in days now gone, let us hope for
ever, co-operated with the employers in the preservation
of a large supply of unskilled or unemployed labour.
But with machinery has come large-scale production,
relatively improving the economic position of the semi-
skilled at the expense of the craftsmen, who, being in
the same wage-bondage with semi-skilled and unskilled,
can only escape destruction by joining in a labour

THE PRODUCER 45

combination that can at once abolish wagery and establish
qualitative production on a sound foundation.

Whatever justification there may be to preserve
existing privileges in a competitive wage-market, such
justification disappears like an evil dream in the har-
monious economy of Guild organisation. Every accre-
tion of skill and experience goes into the common fund
of productive capacity, in due course bringing a far richer
return than was ever dreamed of in the philosophy of
wagery. From this point of view, it becomes evident
that semi-skilled Guildsmen are economically more
desirable than unskilled ; that every semi-skilled man
who passes the test and becomes a genuine craftsman
is an accession to the actual or potential wealth of the
Guild. Thus the craft-unionists, who under wagery
had an incentive always to become a close corporation
and to limit the progress of the semi-skilled, under
the Guilds have a much stronger incentive to work
up to its highest pitch of skill every scrap of available
labour. For not only does every accretion of skill
lighten and sweeten the day's work, but it is one more
guarantee that only qualitative work will be entertained.
Only through the purifying spirit of a proud and self-
reliant craftsmanship can this be attained.

When, therefore, " H " anticipates the formation of
trade unions inside the Guilds " to defend their special
interests as against the general interests of the industry,"
he is partially right as regards the fact, but egregiously
wrong as regards the motive. Undoubtedly the
craftsmen will see to it that their crafts do not suffer
and are not submerged in an inchoate mass of nonde-
script labour. It would surely be an evil day if Labour,
in securing the monopoly of its labour, lost its craft
tradition. The organisation therefore that " H " fore-
tells as something dangerous, or even fatal, to National
Guilds will be in fact necessary and desirable.

This general principle of craft-protection does not
await expression until National Guilds are formed. It

46 NATIONAL GUILDS AND THE STATE

is equally applicable in the transition period of industrial
unionism : equally applicable under workshop control,
upon whose committees must sit the representatives of
every craft and occupation concerned. I cannot help
thinking that industrial unionism would develop quicker
if this fact were rather more emphasised. Fundament-
ally, the case for industrial unionism is the need for
Labour control, but this does not preclude every avail-
able protection for the crafts. The real danger to the
crafts is the failure of Labour to gain that fundamental
monopoly — the foundation of each subsequent develop-
ment.

VII. Technical Training

Of the . organisation of the crafts under the Guilds
little need be written. It is now generally admitted that
technical education and training must be put absolutely
under the control of the Guilds. In these technical
schools young Guildsmen will begin their contact with
industrial reality. We can but murmur a fervent
prayer that they will find it as fascinating as their fathers
found it tedious. Whether such training will eventually
supplant apprenticeship I do not know. The Guilds
will in their wisdom decide when the time comes. Nor
need we seek to know with particularity how craftsmen
will organise for greater security, or how enrich their
traditions by fresh experiences and new discoveries.

VIII. The Test of Good Production

All who accept the Guild analysis of wagery are
agreed that the capitalists mould production to their
own consumptive purposes. But the capitalists dis-
appear when National Guilds emerge from the class
struggle, leaving the control of production to the pro-
ducer, always provided there are consumers to consume.
The production of commodities is not a pastime ; it
is a function created out of human needs. Whilst

THE PRODUCER 47

the producing Guilds have it always in their power to
decline any form of production they may deem deroga-
tory, their most obvious duty is to meet the desires
of the consumers in every legitimate way. And Guild
organisation will be lacking in a vital part unless it
makes it easy for producer and .consumer to meet and
discuss production, in small things as in great. But
that does not really carry us very far, because it is a
fact (and will remain a fact after the proletarian inter-
mediate consumer has become a final consumer) that
in the vast mass of products the consumer throws the
responsibility upon the producer to do his best. This
best — or worst — is roughly tested to-day by market
competition. With that competition removed, the pro-
ducer's responsibility is increased and not decreased.
The burden of a competitive price disappears ; the
pleasure of quality remains or is added. It is astonishing
the vast number of things we consume without special
thought. On rising this morning I flicked the incan-
descent burner into radiant light, forgetting that in my
youth I was quite content with lamp or candle. I
went into the bath-room where is a blessed miracle
of hot or cold water by a turn of the wrist. Very dif-
ferent from, say, fifty years ago. The gas-fitters and
plumbers may have taken the hint from some crotchety
consumer ; I am certain the credit belongs to them.
On coming down to breakfast I found my letters on
the table, all sealed in envelopes, cut and pasted by
ingenious machinery. On the table also were a linen
tablecloth, some salt, mustard, and pepper, their appear-
ance in each case a marvel. I forget what I had for
breakfast, but I remember the tea came from China —
surely a great performance. I glanced at my watch,
which is a self-winder. Had I thought of it, I might
have remembered that my grandfather inserted a key
into the face of his old " turnip," whilst my father
wound up his watch by opening the back. Every hour
of the day down to midnight, which finds me writing

48 NATIONAL GUILDS AND THE STATE

with a fountain-pen, has been full of strange adven-
tures with the products of human skill and ingenuity.
I am tolerably certain that the changes wrought in each
decade are the work mainly of the producer, the crafts-
man, of the inventor who is an inspired craftsman —
and sometimes an idiot. On the other hand, I am
particular about my clothes, my hat, and my boots, and go
to some trouble to get what I want. The makers of
these articles, I generally find, are interested in meet-
ing my requirements apart altogether from monetary
considerations.

Whilst it is. evident that, when the mass of the
workers become final consumers, they will grow more
imperious in demanding quality and variety, demands
which all intelligent Guildsmen will welcome, I cannot
but rejoice that the producer will have achieved sove-
reignty over his own work and be no longer at the beck
and call of others, whose only claims upon him are
their bank-balances. But this control over his own
work, as I have already said, carries very much the
same responsibility as attaches to a doctor when called
for by a patient. Andrew Undershaft, Armourer,
declined to draw distinctions between the warring
nations. But had any Government suggested to him
to reduce the quality of his guns or adulterate his gun-
cotton, I fancy he would have closed his account and
called in his loans.

In nine hundred and ninety-nine cases out of every
thousand we may anticipate friendly co-operation be-
tween Guild producers and consumers. When serious
differences arise, not even soluble by the Guild Congress,
what authority remains to enforce equity and execute
justice ? None, save the State ; and not the State, until
we have related it to the Guilds in general and to the
Guild Congress in particular.

IV
THE CONSUMER FURTHER CONSIDERED

I find it impossible to accept Mr. Hobson's sharp differentia-
tion between " the ordinary production and consumption of
commodities " on the one hand and the use or enjoyment of
public amenities on the other. — Mr. G. D. H. Cole.

Those who maintain that a main function of the State (the
political machinery of government in a community) is to " repre-
sent " the consumer can do so only by including in " consumer "
the user or enjoyer of any kind of service. Now it appears to me
that this is to do violence to ordinary language, and betrays a real
divergence from fact which ought to serve as a danger signal. . . .
My point is, however, that when we come to the services rendered
by the Civil Guilds, the whole matter of adj ustment between users
and Tenderers of service is on an entirely different footing. I do
not consume the skill of the surgeon or the wisdom and experience
of the teacher. On the contrary, I actually enhance the value
of these " goods " by availing myself of them, while I destroy the
value of the boots by wearing them. — Mrs. E. Townshend.

In your chapter on the Consumer an interesting point is raised
in the words : " On an issue so vital, involving ex hypothesi a
bilateral government, it is remarkable that no attempt has been made
to define consumption or delimit the role of consumer." Might
I suggest that the simple terms " membership " and " member "
might meet the case ? And, similarly, would not the term
" executive " be more suitable than " producer " ? I think your
readers would find if they re-read the latter part of the chapter in
the light of this substitution of terms, those recommended would
fit quite well. Take the following instance : " The logic of the
argument inevitably leads to the control of the ' executive ' by
the ' member.' " The aptness of the term " member " is particu-
larly noticeable in the difficulties arising out of Mr. Cole's remarks.

49 E

so NATIONAL GUILDS AND THE STATE

It covers and combines the terms " users " and " enjoyers." And
not only that, but by regarding the man walking in the park and
his neighbour who buys a bottle of whiskey in the light of State
"membership," it suggests a community of interest which is
lacking in the other terms quoted.— Mr. T. Constantinides, in
Letter to the Writer.

I. Consumers and Users

In his critique upon my chapter " The Consumer,"
Mr. Cole rejects my definition as too narrow, con-
tending that it must be broad enough to include the
enjoyers and users of public amenities. I have no
pedantic objection to a changed or added meaning of
an old word, providing that it tends to clearness or
convenience. Every new body of doctrine colours or
distends current words or terms ; such a process is
essential to the flexibility of our language. I do not
think that, as things are, the word " consumer " con-
notes user or enjoyer. If, for example, we asked the
frequenters of public parks, libraries, or art-galleries
whether they would consider themselves " consumers,"
it is certain that they would practically all reply that
they saw no connection. If Mr. Cole were to persist,
he would find it necessary, when using the word in the
wider sense, to enter into such long explanations that
ultimately he would be driven to find an " umbrella "
word more suited to his purpose. Mr. Constanti-
nides is evidently alive to the difficulty, suggesting
" executive " for producer and " member " for con-
sumer. But when I wrote " producer " I did not mean
"executive"; when I wrote "consumer" I did not
mean " member " ; I meant one who makes an effective
demand upon the producer for a specific commodity.
I used the word, in short, in its economic sense. In
origin and use, the word always has had a strictly eco-
nomic meaning, the obverse to the reverse of producer
— the two words balancing each other, and conveying
that idea whether written or spoken. It is a balance

CONSUMER FURTHER CONSIDERED 51

I should regret to see disturbed. Nor would It add
to lingual convenience, because if " consumer " is in
future to bear a civic sense, we shall have to evolve a
new word for economic consumption. Without pre-
judice, then, to Mr. Cole's real argument, I think it
better to confine the word " consumer " to the same
category as " producer," and to wait upon time and
circumstance to create a word expressing Mr. Cole's
meaning. Nor do I think the words suggested by Mr.
Constantinides meet the case. State " membership "
comes too near to citizenship, whilst the connection
between " executive " and " producer " seems too
remote, although I appreciate the idea behind the sug-
gestion. For my part, I can only announce that when
I use the word " consumer " or " consumption," I
mean the personal act or general process of consuming
commodities measurable in quantity or value.

II. The Civic Element

Mr. Cole is not concerned with a verbal nicety but
with a matter of substance. He and I do not actually
disagree about the meaning of the word " consumer,"
but upon our different conceptions of public policy.
My difficulty is that our lines of agreement and dis-
agreement are so interlaced that it seems almost im-
possible to come to an issue. The broad distinction
between us is, I think, this : I believe that, providing
there is the appropriate Guild organisation, no impasse
can ever be reached between producer and consumer
unless a fundamental question of public policy be raised,
whereas Mr. Cole sees the future consumer (passed
into the class of " final consumers " by the abolition
of wagery) energetically asserting himself in a free
society, as consumer, and insisting upon the State
machinery constantly exerting itself on his behalf. In
the fuller economic life thus envisaged, strictly eco-
nomic consumption apparently merges into the con-

52 NATIONAL GUILDS AND THE STATE

sumption of public amenities. " There is a civic
element," he says, " in all acts of use, consumption or
enjoyment ; and in a free society this civic element
would be far more prominent than it is to-day." Even
now there are " some industries and services in which
this civic element is greater than it is in others," and
I gather from the argument, although Mr. Cole does
not actually assert it, that these industries and services
will tend to increase in number and in volume of
work.

With this prophetic analysis, I do not substantially
disagree ; on the contrary, it seems a reasonable infer-
ence from the main premiss. We only diverge when
we discuss the principles of organisation applicable to
this new life. Mr. Cole would ascribe to the State,
as one of its functions, the protection of the consumer
as a class, whereas I regard the State as the protector
equally of producer and consumer ; as the custodian
of public amenities for the use and enjoyment of citizens
without regard to production or consumption as such.
Further, by hypothesis, having relegated the economic
function to the Guilds, and regarding production and
consumption as complementary stages of one economic
process, I object to entangle the State organisation,
by a side issue, in the economic net from which it has
been rescued. Further, just as there is a " civic element "
in consumption, use and enjoyment, there is a correlative
civic element in production ; it is this civic element,
common to producers and consumers, which relates
our economic to our national life ; it is the breach or
wanton disregard of this civic element — actually our
heritage as citizens — that involves public policy, and
calls for a national or civic solution by the people in their
capacity as citizens. Mr. Cole will not disagree with
me when I add that we must look to the development
of this civic element as the unifying factor both in our
communal and national life. Without it, we might,
by clever industrial organisation, grow fabulously rich,

CONSUMER FURTHER CONSIDERED 53

but we should not know how to live. Here we catch
a gleam of the spiritual function of the State.

III. Public Policy

It is, of course, difficult, if not impossible, to define
"public policy." The law-courts have the phrase
"contrary to public policy," and upon it many quaint
judgments have been delivered. It is an intangible
element in our national life, yet very real in practice
whatever it may be in theory. I certainly shall not
attempt to define it, but perhaps I can indicate its scope.
We recognise it as the expression of public intention
and settled public tendency. Its appeal is not sectional
but broadly civic. Suppose, for example, the Guilds
had rooted out wagery and profiteering, and then some
rebel Guild sought to re-establish them. In resisting
such a reactionary movement we should rightly appeal
to public policy. Or suppose Chinese labour were to
be introduced into this country, systematically and in
large numbers. I do not think there is any law against
such procedure, but, if it were attempted, we should
invoke public policy against it. Public policy may,
or may not, be inscribed on the Statute Book ; neverthe-
less, we know instinctively as citizens when it is threatened.
We have no law in this country, so far as I know, against
miscegenation, but if we had a population of twelve
million negroes we should speedily declare it to be
contrary to public policy, law or no law. The basis of
public policy is that civic element which is common
to every phase of activity — consumption, production,
education, medicine, law, literature — fundamental citizen-
ship. And I would keep the State from any clash
with the Guilds except when public policy unites us as
citizens against anti-social action on the part of any
Guild or group of Guilds. Personally, I think any
such contingency would be extremely remote.

Mr. Cole thinks that my criterion of public policy

54 NATIONAL GUILDS AND THE STATE

breaks down when applied to practical affairs. He
cites the railway service, the Post OfRce, the shipping
services as coming rather within his broader definition.
But they present no difficulty, so far as I can see ; they
are only the Colonel Bogey of this particular contro-
versial course. Let me take them seriatim.

(i.) Railways. — The transit of commodities goes into
the cost of production, and accordingly railways are
essentially producers, so far as they carry commodities,
whether for intermediate or final consumption. But
they also carry passengers along the King's highway
— for such is the railway by Act of Parliament. Here
our rights as citizens are touched, and accordingly
public policy has long since dominated railway practice
— dominated it in form if not in fact. If I want to travel
from London to Oxford, to remonstrate with Mr. Cole,
I am so entitled, providing I obey the conditions. If
those conditions are harsh or inequitable, my citizen
rights are invaded. It is true that I am, in this instance,
also a consumer, and it is therefore difficult to distinguish
between the State intervening on grounds of public
policy, as I contend, or because I am a consumer, as
Mr. Cole would contend. But, at least, I am quite
definitely a consumer in the economic sense of the word,
and not merely a user or enjoyer. Historically considered.
State action in regard to the railways is undoubtedly based
on public policy.

(ii.) The Post Office. — Personally, I think that
public policy is so deeply concerned with the Post
Office that it ought to become a Civil Guild. But it
is also a gigantic industrial organisation, closely con-
nected with transit, engineering, metal production,
coach building, and I know not what else. If the
Postal Servants definitely decided in favour of affilia-
tion with the Productive Guilds, as a democrat I should
accept their decision, but would insist upon such Special
State representation as public policy would dictate.
Public policy, please note, not specially based upon

CONSUMER FURTHER CONSIDERED 55

use or enjoyment, but upon certain fundamental citizen
rights. Nor am I user or enjoyer when I post a letter.
I am quite certainly a consumer, out of which, in normal
times, the Post OiBce makes a considerable profit — a
gross profit of one halfpenny on every penny stamp.
Historically considered, State control of the Post Office
and State intervention in the case of its predecessors
have undoubtedly been based on public policy.

(iii.) Shipping Services. — The Mercantile Marine
Law is surely based on public policy, and without re-
gard to user or enjoyer. When Mr. Cole has had as
many involuntary interviews with Consular Officers
and Port Doctors as I have had, all his doubts on this
point will be resolved.

So far as these three industries are concerned, my
conclusion is that they fall naturally under the rule of
public policy, justifying State intervention, whilst they
deal with consumers economically considered, and not
users and enjoyers.

But Mr. Cole adduces another instance. Suppose
some financial potentate to construct playing-grounds,
cinemas, houses and other amenities, " are the work-
people who use these things consumers of the inter-
mediate class, or are they citizens and enjoyers ? "
My answer is that so long as these amenities are re-
served for the workpeople concerned, they are mere
additions to wages (the quid pro quo being attachment
to the works), and the workers, being still wage-earners,
remain intermediate consumers. But if the materiel
of these amenities be transferred to the community,
for the use and enjoyment of all citizens, then the
workpeople still remain intermediate consumers, but
enjoy the amenities as citizens — passive citizens.

IV. Public Amenities

We must be careful not to erect public policy into a
fetish. It would be easy for the State, as representing

56 NATIONAL GUILDS AND THE STATE

its citizens, to turn public policy into a stick to beat
any dog of a Guild that broke out in a new direction.
Every conservative might hold up his hands in pious
horror, seeing in each Guild development an inroad
upon civic rights, a breach of public policy. The natural
instinct of the Englishman, when he sees something he
dislikes, is to invoke the law " to put it down." Never-
theless, our safety as a people is found in our rooted
affection for civic virtue and personal liberty. There
is no reason to suppose that the same civic loyalty will
not persist in the Guild period. But because this instinct
is so strong within us, all the more reason that every
struggle between the State and the Guilds should be
most cautiously based on enduring principles and not
upon transitory interests (as would be the case if the
State continually intervened on behalf of the consumer)
or upon prejudices derived from the capitalist period.
Apart from the fundamental principle that the State
must not intervene in the economic organisation of
the Guilds, save only where citizen life and rights
are involved, I should look with anxiety upon any
intervention on such subsidiary or alien reasons as
disputes between producer and consumer. The inter-
departmental friction that must ensue would tend to
national instability.

On the other hand, we must not undervalue the
importance that Mr. Cole rightly attaches to public
amenities, with their resultant citizen rights — the rights
of user and enjoyer. He and I are agreed upon the
large part that amenities must play in the life of our
economically enfranchised citizens. But whereas he
would bring these citizen rights within the ambit of
" consumers," confusing citizen rights with the strictly
economic interplay of producer and consumer, I would
reserve the life of the citizen (in whatever capacity,
whether producer or consumer) to the care of the State.
Citizen rights and consumers' interests are in different
categories. To bring them under one denomination

CONSUMER FURTHER CONSIDERED 57

spells confusion of purpose and gratuitous friction between
the State and the Guilds.

I am content to take Mr. Cole's own instance to
prove my case. He supposes the State, as the repre-
sentative of the consumers, to be dissatisfied with the
price charged for pots and pans. The appropriate
department would complain to the Guild representing
the sheet-metal workers. The answer comes back that
the high price is due to the charges of the Iron and
Steel Guild for tin-plates. The State next takes up the
matter with the Iron and Steel Guild, then, failing
satisfaction, to the Guild Congress, and if necessary to
a joint session of State and Congress.

But siarely Mr. Cole is overlooking the essential
principles of Guild organisation. No profits ! Why
set all this machinery in motion when an actuary could
settle the question in a week .'' He has only to ascertain
the net cost, making such allowance for sinking fund
and depreciation as may be set out in the Guild Charter
or agreed upon at the Guild Congress — this latter for
preference. Nor must we forget that the Metal Workers'
Guild would be represented upon the governing body
of the Iron and Steel Guild, his agreement to prices,
with all the facts before him, being essential to any
transaction between the two Guilds.^ I cannot help
adding that if Guild organisation were incapable of
settling such a trivial problem, its personnel would be
unequal to the task of administering a hardware shop,
not to mention a Guild. But I must not do Mr. Cole
an injustice. It is true that he sketches the machinery
as related, but he adds that he does so " without prejudice
to the right of the sheet -metal workers themselves,
through their Guild, to raise the question with the Iron
and Steel Guild, either directly or through the Guild

' My assumption is that exchange price must be based on the actual cost of the
product. But whilst in general the price should be the cost, this should be regarded
as a convenient method of exchange and not a fundamental principle. Social or
economic circumstances may render it desirable to sell above or below cost. Where
there is any variation from cost there must of course be suitable protection against
profiteering.

58 NATIONAL GUILDS AND THE STATE

Congress." I think what he really means is that, in
the ordinary course of business, the two Guilds would
settle the matter between themselves, whilst the larger
machinery is held in reserve. My answer is that I do
not object particularly to this ultimate machinery,
but it ought only to be used when questions affecting
public policy are raised, as for example a point-blank
refusal to supply pots and pans at all, or a differentia-
tion of supply to favoured localities. Here our rights
as citizens are clearly involved and the local authorities,
municipal or otherwise, would have a locus standi, either
before the Guild Congress, the Joint Session, or the
Judiciary. I can hardly imagine such a comedy in the
case of pots and pans, but the comedy might turn to
tragedy in the case of fruit, vegetables, milk or manure.

The vital importance of maintaining this rigid dis-
tinction between public policy and the consumer, as
such, may be illustrated by carrying this instance a
little further. Suppose that the State has actually
intervened on behalf of the consumer. John Smith
and William Robinson are neighbours. One is a
sheet-metal worker ; the other grumbles at the cost
of pots and pans. Both are equally citizens. When
the State intervenes, on Mr. Cole's model, the one
is pleased, the other angered. John Smith asks why
the State should side with Robinson against him.
Personally, I see no answer. The State is acting
ex parte. But if the principle of public policy be adhered
to, both Smith and Robinson can meet on common
ground ; both are equally interested in the preserva-
tion of their citizen rights. I should be surprised if
John Smith, in these circumstances, would not emphatic-
ally declare that his rights as a citizen are more to him
than the more restricted interests of his Guild.

In other words, whatever the State does in relation
to the Guilds, it must aim to unify and not divide its
citizens.

CONSUMER FURTHER CONSIDERED 59

V. Protection of the Consumer

Must, then, the consumer fend for himself?

Mr. Cole thinks that the logic of my argument
means this. It is true that I wrote that " the processes
of production and consumption cannot be economically
differentiated." I went further : I asserted that, as
between the producer and the consumer, the producer
must have the last word. And, subject to public
policy, the considered opinion of the citizen body, that
is my position. It is speculative rather than practical,
because the producer produces that the consumer may
consume. But I also wrote : " Nevertheless, after wage
abolition, we must provide, inside the Guild organisa-
tion, for effectual contact between the Guilds and the
final consumer." I also suggested the machinery,
namely, a Distributive Guild. Then I went on to
assert that, after all, in practical affairs, it is the producer
who creates the demand.

It is important to be clear about this. Mr. Cole
has misapprehended the argument, so probably others
have too. This is what I wrote : " It is only in so
far as the producer, by instinct or understanding, enters
into the mind of the consumer that he can produce at
all. This is, I believe, the psychological explanation
of the well-tested maxim that the supply creates the
demand." Psychologically, the reverse is equally true :
unless the consumer, by instinct or understanding, can
enter into the mind of the producer, he will not get what
he wants. But if producer and consumer can finally
become of one mind (as happens millions of times every
year), then all that remains is to put the skill of the
producer to the test.

My argument was not economic but psychological.
Equally psychological is the maxim that the supply
creates the demand. I did not refer to it as a law
or build an argument upon it ; I referred to it as
a " maxim." Mr. Cole denies the truth of it and

6o NATIONAL GUILDS AND THE STATE

proceeds to prove it true. Let me quote : " The pro-
ducer and not the consumer is certainly the originator
of new forms of supply ; but the consumer determines
whether he prefers to consume these new varieties
or to persist in his demand for the product to which
he has been accustomed." But did not the producer
equally create the demand for the former product ?
When did the consumer cease to create the demand
and the producer take up the mission ? It must be
a long time ago, for the mediaeval Guilds prided
themselves upon creating the demand for their pro-
ducts. In those days, it was by excellence ; to-day,
as Mr. Cole properly emphasises, it is by advertising.^
But it is not true of staples, Mr. Cole says. Tea .''
Sugar ? Leather ? Iron and Steel ? What staples .''
I think it will be found that practically every known
staple, from potatoes to paper, has been the subject
of variation and improvement by the producer, with
the demand changed or enlarged in consequence.
Indeed, it must be so, for the simple reason that the
producer knows a vast deal more about his product
than the consumer. Whilst we must welcome a more
fastidious body of final consumers, men and women
with a more practical knowledge of products and goods
than the present final consumers, whose artificiality
of life and ignorance of manufacturing processes render
them the dupes of rogues and designing tradesmen,
whilst we must by prudent Guild organisation prepare
the way for the realisation of their wishes, in small
things as in great, nevertheless it is the producer, the
creator, who remains master of the craft. It is the work
of his hands we must finally accept. For my part, I
shall be infinitely grateful. But my gratitude will be
all the warmer, if on due occasion I can persuade him
to make something for me as I would have it made.

1 We must not dismiss advertising cavalierly. I apprehend that the Guilds will
have to adopt some advertising methods to announce their products. The essential
thing is truthful statement.

CONSUMER FURTHER CONSIDERED 6i

All I ask is that I may be given facilities to get into
touch with the man I want. I shall find out about
him from the Distributive Guild. I shall find, on
making his acquaintance, that he is not arrogant, but
helpful and kindly.

VI. Guild Provision for Consumers' Claims

Subject to certain reservations, such as the precise
function of the consumer and, perhaps, the ultimate
structure of the State, Mr. Cole and I are substantially
in agreement upon immediate problems. He accepts
my analysis of the consumer, as he is to-day. He
agrees with me that to-day the capitalist is the protago-
nist of the consumer. He widens my definition of
the consumer after wage-abolition, which is by no
means a hanging affair. On the other hand, I agree
with him that the future final consumer will be alto-
gether a more imperious and fastidious person than
we can easily imagine in these drab days of triumphant
wagery. We both visualise a free society when every-
body will, so to speak, travel first class ; when, as the
Americans say, " the best will be good enough." Our
problem is to ensure that the Guild organisation shall
be pliable enough to meet the needs and demands of
our future Guildsmen and citizens. Nor am I sure
whether, in effect, words do not divide us on the question
of public policy and the State representation of the con-
sumer, the user and enjoyer. I suspect that in practice
very few issues will ever reach the State unless they
imply more than a mere difference between producer
and consumer. The something more will trench upon
public policy ; the something less may hinge upon
the consumer's claim for something not granted by the
producer. But if I can carry Mr. Cole with me to
this extent — that the State must only intervene in the
last resort — I shall be content to let our several theories
await the test of time and further experience.

62 NATIONAL GUILDS AND THE STATE

Granted such general agreement, what remains is
an affair of practical statesmanship — to find machinery
equally acceptable to both our theories to bring pro-
ducer and consumer into effective contact. My solu-
tion is the Distributive Guild. Mr. Cole, I think,
attaches considerable importance to local represen-
tation, certainly other Guildsmen do, as I do myself.
It seems to me that in building up the Distributive
Guild, we might consider how far such an organisa-
tion could cover local activities, linking up with local
authorities, so that local opinion, on all problems con-
cerning consumer, user and enjoyer, could without fric-
tion and with great advantage find effective expression
in the Guild organisation.

DISTRIBUTION

For my own part, I agree heartily that the basis of the Guild
Society will be producer control in the economic sphere, but I am
anxious, too, to see every opportunity offered for the user and buyer
to make' known their desires and point of view, and I am not
shaken in my belief that geographical units will serve best to
provide this. — Mr. Maurice B. Reckitt, in Letter to the Writer.

In order to give definiteness to our suggestion, we hazard a
statistical estimate. Thus limited, the possible extent of the
annual trade of the Co-operative Stores and Wholesales in Great
Britain, if they extended to their utmost, from one end of the
country to the other, may be put — spending any extensive economic
transformation of society — at something like four to five hundred
millions sterling, being only one-fifth of the total national produc-
tion. The possible sphere on the Continent of Europe is at least
as narrowly limited. It has therefore to be concluded, with regret,
that with regard to actually a majority of the workers, and even
a large majority, the industry in which they are employed cannot
be brought under the control of Voluntary Associations of Con-
sumers. The Co-operative Movement, whilst it may help them
as consumers, afFords, in their working lives, no alternative to the
Capitalist System. — Sidney and Beatrice Webb.

The Government does not seem to appreciate the fact that
groceries and provisions are distributed among the working classes
chiefly through small shopkeepers doing from ;^io to £']o weekly.
There are four distinct channels of distribution : (i.) The old-
fashioned grocer, mainly credit, a small and diminishing trade ;
(ii.) the multiple shop, which accounts for a large proportion ;
(iii.) the co-operative societies, which supply about ten millions ;
(iv.) the small shop-keeping classes who supply, in my estimate,
at the least 50 per cent of the people. — Mr. Arthur Richardson,
M.P.

63

64 NATIONAL GUILDS AND THE STATE

The statistical position of Co-operative Societies in the United
Kingdom on December 31, 19 14, was as follows :

Number of Members . . . 3,504,456

Share Capital
Loan Capital .
Sales for 19 14

•

£46,235,849
£22,833,606
• £147,5 5o>°84

Total employees,
1916 :

Co-

-operative

Wholesale Society, October

Distributive .
Productive

12,090
. 16,728

Total 28,818

I. Equitable Distribution

Distribution has many meanings ; for my present
purpose, it may be defined as the assignment to the final
consumer of his share or portion of the industrial product.
I do not know whether the misconception of Socialism,
as a dividing-up of the wealth of the nation, is as prevalent
as formerly. I hope not ; but without argument it
is assumed in this chapter that the final consumer has
no claim upon anything other than such products as
are made for consumption. The construction of the word
is not without significance. Dis-tribute — the liquidation
or discharge of tribute ; in reality, a return in kind for
tribute exacted in labour ; an admission that he who
yields tribute in labour is entitled to its equivalent
in meal or malt. All social and industrial theories
spring from mankind's unwearied search for equitable
distribution. First, it must be equitable ; then as
large and satisfying as human ingenuity can make it.
This insistence upon the primary element of equity
is in contrast with the commercial theory that pro-
duction comes first and that distribution may be deferred
as of secondary consideration. The ethical inferences,
particularly in their bearing upon wage-abolition, are
obvious. If, at the present moment, the community
gave full weight to all that is implied in equitable dis-

DISTRIBUTION 65

tribution, instead of fining food-hoarders, we should
hang them. The bareness of the national cupboard
is teaching even the unregenerate that human needs
must have priority over the claims of gold-owners.
They may hoard their gold, but not food ; they may
eat as much gold as they can digest, but each week
they may eat one shilling's worth of meat, if they can
get it. Let us hope that the lesson will be remembered
in time of peace. Whether under Capitalism or National
Guilds, whether in peace or war, distribution is the basis
of society, the distribution of physical, intellectual, and
spiritual sustenance.^

II. The Domestic Cupboard

Of all the economic functions, distribution comes
closest to the intimacies of life. Men and women,
fathers and mothers, young and old pray its aid that
they may live in comfort and with such external dignity
as they can command. The agents of distribution
see life and minister to it, touch it as do no others. A
retail grocer in an industrial district knows more about
the domestic life of the community than the charity
organiser ; in times of depression or during strikes
he may bear the burden not only of their debts but of
their hopes and fears. The milkman, calling at the
door, sees more than the jug he fills. A philosophic
dressmaker — if such there be — can read her customers'
souls that are closed books to the parish priest. A
jeweller, selling a wedding-ring to a pair of lovers, may,
with imagination, for a moment glimpse the eternal.
Across the street, the pawnbroker, not yet hardened
to his trade, consciously traffics in the symbols of death
or despair. Dante, seated for a single day behind
the counter of a suburban chemist, might bequeath as
a priceless heritage a humane comedy. The boot-

• This passage was written during the war. A year after the Armistice it remains
equally true.

66 NATIONAL GUILDS AND THE STATE

maker, kneeling before a customer, may sense domestic
drama in the hole of the sock or its careful darning.
How shall we veil our inner life from the bookseller
if we buy the books of our choice ? Life stands bared
and hungry before Distribution, demanding board and
bed.

This contact with the intimacies, the realities, of
our daily existence must not blind us to the fact that
distribution is an economic process, the final stage
and charge on production. Even though the artist
or philosopher may profitably approach his task through
distributive channels, may, in consequence, clothe dis-
tribution with social or mystical attributes, it remains
always a definite economic factor in the material world.
But this contact with the pulse of life is also a fact which
we cannot ignore. We live in families and communities ;
therefore, families and communities, expressing them-
selves through their appropriate organisation, must play
their part in the business of distribution. It is by reason-
ing such as this that National Guildsmen argue for local
representation upon the Guild distributive machinery.

In addition to the purely domestic life, with which
distribution is so closely concerned, communal or
municipal life comes also within its purview. It is no
mere coincidence that our municipal councils are largely
composed of retail tradesmen ; on the contrary, these
enterprising gentlemen, no doubt public-spirited, have
learnt by experience how vitally their businesses are
affected by municipal policy. The organisation of local
life largely revolves round the centres of distribution.
Trains, trams, and 'buses, the very streets themselves,
radiate from the great emporia, obscuring without
compunction a beautiful cathedral and always deaf to
every aesthetic appeal. In many of the older towns, we
still find the railway station at some distance from the
heart of the city, a perpetual reminder of the days when
the inns and posting establishments were strong enough
to protect their threatened interests. In these days of

DISTRIBUTION 67

war, the Food Controller has had to recast his local
committees ; he found that those appointed by the town
councils were packed by retail tradesmen, women and
co-operators being excluded.

We must, however, look to the future. Is it too
much to expect that a more enlightened Labour policy
shall transform municipal life and lay the foundations
of a greater and more aesthetic tradition .'' May we not
hope that a goodly supply of high explosives shall be
reserved after the war to blow away our rookeries and
mean streets ? Moral dynamite, too — a revulsion from
the ugliness of existing towns, when men shall say of
our congested structures that there is no beauty in them
that we should desire them. Public architecture (all
architecture is public), public health, public education,
the arts and sciences — all these belong to the locality,
and must be coloured by its spirit ; must be reviewed
by an emancipated body of final consumers and revolu-
tionised in economic co-operation with the distributive
agencies organised by production.

III. The Craftsman and Guild Discipli

NE

It needs no gift of prophecy to foresee that wage-
abolition spells a larger consumptive demand in quality
and variety — an effective demand both from the com-
munity and the individual. Qualitative production, in
the sense of industrial craftsmanship, will probably still
find its impetus in the workshop and from the centre,
the supply creating the demand. In my last chapter,
I drew a distinction between the industrial and aesthetic
craftsman, leaving the latter to subsequent consideration.
I did this because it is obvious that local life, if not the
inspiration, is at least an indispensable element in art
craftsmanship. A group of craftsmen in Leeds will
design differently and with a different result from other
groups in Edinburgh, Birmingham, Bristol, or London.
Doubtless, they will have much in common, because

68 NATIONAL GUILDS AND THE STATE

they have a common language and literature. But their
differing local traditions, habits and customs, must find
expression in their work. If they fail in this, we must
regretfully conclude that the centralised methods of
capitalism have finally killed the genius loci without hope
of resurrection. But I do not believe it. All to the
contrary ; it seems certain that in Great Britain, a
veritable heptarchy of arts and crafts waits impatiently
for organic expression. Wherever these local art groups
have been organised, the local spirit has promptly
revolted against both common and conventional designs.
Even our regiments insist upon the territorial badges,
reminiscent of historic origins and traditions. I should
immensely enjoy hearing a dozen pure-bred Territorials
explaining to each other the meaning and history of their
regimental emblems. You cannot mistake Yorkshire for
Welsh choral singing, and I dare say a Lancashire brass
band has its own distinctive rendering of Handel.

The genius of local life being granted, the problem
remains how to fit in the art craftsman, since his work
must generally be local and his talent locally appreciated.
In my opinion, it will not be long before the demand for
his work will be in excess of the supply. The architecture
of the near future, charged with the rebuilding of
dilapidated towns, will no longer be content to work on
models supplied from an unimaginative centre. The
revolt against conventional municipal architecture, begun
by Earner Sugden, of Leek, will spread over the whole
country, when the final consumer comes into his own.
Interiors, with their fittings and furniture, must, of course,
keep pace with the architectural advance. If I am asked
why I emphasise architecture, I reply that buildings are
the most accurate index of local spiritual and material
conditions. But craftsmanship travels beyond bricks
and mortar ; it is concerned with everything from books
to fabrics.

My own solution of the problem, long since adum-
brated in National Guilds, was that the craftsman

DISTRIBUTION 69

should gradually work free from the discipline of the
Guild by creating a personal demand for his own
products. The case I cited was a carver, who had
gone through the usual training of a carpenter, but
whose genius finally asserted itself in fine and individual
carving. I predicated a special demand for his work
amongst his fellow-Guildsmen, who gladly paid him
privately for work privately done. In time, we find
him so busy with private commissions that he cannot
do the routine work assigned him by the Guild. He
is accordingly released for private work, subject to
payments to the Guild ensuring him maintenance in
sickness and old age. It is possible that even yet this
is the true solution, bearing in mind that the artist works
best without restraint ; but we can reconsider it when
we have discussed the functions and organisation of the
Distributive Guild.

In this section, it will be observed that the argument
is based upon the assumption that art and craftsman-
ship thrive best in the sympathetic atmosphere of
neighbours and friends. But that assumption does not
preclude a local growing into a national reputation, with
all its attendant results. Nor does it preclude a great
artist from forming his own school and attracting artists
and craftsmen from other localities or countries. My
only proviso is that artist and pupils alike shall retain
their connection with their proper Guilds.

IV. A Note on Municipal Life

Recognising, as we must, the important part which
municipal life must play in distribution, and having
regard to the consolidation of production implicit in
Guild organisation, it is certain that our municipal
institutions must be transformed before any practicable
alignment becomes feasible. Our present municipal
organisation is a hotch-potch of old and new growths,
without form, void of justification. Why should Man-

70 NATIONAL GUILDS AND THE STATE

Chester and Salford, and a dozen similar instances, be
governed by two separate councils ? Without inquiring,
I presume it is due to the difficulty of unifying the rates
and the amour propre of certain elected persons and
officials. In the whole of industrial England and Scotland,
I doubt if there is a single municipality that can really
speak the mind of the community which it is supposed
to represent.

My own view is that the municipal reorganisation of
England must proceed on the theory of the smallest and
the largest unit. The smallest unit is undoubtedly the
parish, a body whose powers to-day are strictly and
tyrannically kept in subjugation to the County Council.
I know not how many attempts to make parish life
attractive have been frustrated by the " gigocracy " that
rules the County Councils. But when the official life of
the Parish Council is related to distribution, it is clear
that far greater responsibilities must be thrown upon it.
When this is achieved, parish life will regain its long-
vanished charm. It is only when the Parish recovers its
economic life that " government from below " — the mot
d'ordre of economic democracy — can begin.

It is easy to discover the smallest unit, but difficult to
define the largest. The existing municipal boundaries
will not suffice, for they are arbitrary in selection and
partial in their effect. Transit, electric power, water,
sewage, lighting, streets, roads cross and recross these
boundaries, oblivious of their existence. The largest
local governing unit must, as far as possible, compass all
these municipal services, reducing their management to
the simplest forms. Thus stated, it would almost seem
as though the real boundary of the ideal large unit is
the watershed. If this be so, municipal power must
finally express itself in the Province, of which the
French prefecture seems to be the best model. If we
look to the natural configuration of the country — its
watersheds, in fact — and consider how suitably each
confined stretch of country lends itself to separate local

DISTRIBUTION 71

government, we shall find our Provinces naturally
delimited, and, oddly enough, a new heptarchy.

With the local power of the parishes balancing the
central power of the Provinces, we should not only see
a new local life springing up, in its turn a counterpoise
to the intellectual life of the national capitals, but we
should also have a local government powerful enough
to deal with the National Productive Guilds on terms of
equality.

V. The Small Shopkeeper

It did not need the food-queues of war-time to
convince the observant that our system of distribution
is not merely inefficient but chaotic. Even if National
Guilds had never been proposed, we should, nevertheless,
have been compelled, sooner or later, to assume some
control, possibly through the local governing bodies,
over the disorganised retail system of this country.
The rapid development of the centralised stores, the
centipedal march of the multiple shops, the growing
monopoly of food-stufFs, the obvious fact that thousands
of retail establishments were " tied-houses," dummies
of enterprising merchants, compelling small men to
shoulder the debts while they captured the plunder —
all these were gradually turning serious men towards
municipal trading. The increasing cost of distribution,
mainly by advertising, which inevitably fell upon the
consumer — too often advertising in lieu of quality —
the artificial house and ground rents thus created, falling
in part upon the consumer and in part upon industry,
the growing dominance of the middleman, whose func-
tion had long been exceeded, so that he could squeeze
the producer on one side and the consumer on the
other — these considerations were already a problem
when war began. The war taught us that probably a
million men and women were working at uneconomic
occupations in distribution on that fateful August in
1 9 14. Nor can we forget the malign influence exercised

72 NATIONAL GUILDS AND THE STATE

by distributive firms upon our Press by the advertising
lever. Distribution was in a bad way.

Beyond noting their general inadequacy, we need
not here concern ourselves with the small retail shops.
They were doomed in any event ; they would certainly
have succumbed when, with wage-abolition, several
more million intermediate consumers passed into the
final class, with an effective demand far beyond their
reach. Yet, if Mr. Arthur Richardson is approximately
correct, these small shops cater to 50 per cent of the
population. But that is only another way of saying that
they are a parasite upon the wage-system. Granting
that there are many " old-established " shops doing a
" highly respectable " credit business in suburban areas,
it is safe to assume that the great majority of retail shops
live on the pence and shillings of exiguous wages. In
the broad sense, they are " truck-shops," supplying only
what wages can buy. Truck-shops, too, in another
sense : they sell precisely what the capitalists, the
present protagonists of consumption, choose to supply.
They batten on the wage-system ; they must fall with
it. Mr. and Mrs. Sidney Webb, in their Report to the
Fabian Research Department, say :

" Apart from the very poorest people who live on the
crumbs that fall from the tables of others, it is still
matter for doubt whether the Co-operative Movement
can attract the mass of the wage-earners in low-paid
employment. So far as Great Britain is concerned,
the practice of catering for the class which prefers a
substantial dividend, and is willing for this end to
continue to pay the prices of the retail-shopkeeper,
militates against the membership of the worst paid."

If this be so, then it follows that the shopkeepers in
an industrial district must supply the most poorly paid
wage-earners. They certainly take under their wing all
who are casually employed or subject to prolonged
periods of unemployment. We are safe in presuming
that any change of status, or even any widespread increase

DISTRIBUTION 73

in wages, would witness a movement of their customers
either to the Co-operative Stores or to the better organised
establishments. The small retailer automatically dis-
appears with the disappearance of proletarian demand.

But Mr. and Mrs. Webb say this also :

" Just as there is a class too poor for Co-operation,
so there is a class too rich. So long as anything like the
present inequalities of income endure, the wealthiest
part of the population is never likely voluntarily to join
the ranks of the working-class Co-operative Movement.
The families enjoying substantial incomes — especially
when the income is received at greater intervals than
week by week — are not attracted by the quarterly
dividend, which they consider they have unnecessarily
paid for in the prices, and they prefer the more obsequious
and usually more minutely particular service of the private
shopkeeper."

True ; but permit me to set it in a Guild frame.

Distinct from the suburban trader, who deals mainly
with the salariat, the individual shopkeeper is concerned
with the intermediate consumer. That is, more or less
unconsciously, he is the agent of the employer in the
supply of raw material for the maintenance of the labour
commodity. We must not let his apparent economic
independence obscure the fact of his agency. He is
absolutely in the hands of the capitalist class, supplying
the goods they determine as suitable for the wage-earners
and financially dependent upon the banks to carry on the
petty profiteering by which he contrives to continue a
member of the middle-class. Within the limits imposed,
and driven by the spur of a rather mean competition,
he doubtless does his best for his clients. But his raison
d'etre is to keep the wage-earner as satisfied with his wage
as the circumstances permit.

I have remarked that the small shopkeeper is a
parasite upon wagery, a growth from the soil of economic
subjection. May not the same be said of the Co-operative
Movement } Yes — in the sense that, in all its stages.

74 NATIONAL GUILDS AND THE STATE

productive and distributive, it is practically confined to
proletarian requirements, expressing in material things
the life and habits of the wage-earning class ; no — in
the sense that, by its organisation, it is strong enough
to persist through every change of wage-earning status,
and, by its democratic basis, capable of adjustment to a
new order of society ; yet, again, no — in the sense that
it is, in a marked degree, independent of that centralised
capitalistic control so characteristic of the small shop-
keeper. The capitalist says to the shopkeeper : Supply
these goods or go without ; the Co-operative Society
says that it will please itself. But both supply practically
the same commodities, and neither protests against the
wage-conditions that confine their customers to such
narrow limits of demand. If the industrial distributors
were with one accord to declare that they would no
longer insult their dignity by supplying wage-slaves,
they would bring near a moral and economic revolution.
The employers rely upon them to keep their customers
content with the existing economic system.

Remain the great emporia — Harrod's, Whiteley's,
Selfridge's, and the like, not forgetting those quasi-
co-operative societies, the Army and Navy Stores, the
Civil Service, and half-a-dozen others. We may say of
them that, on the whole, they supply the best that can
be got for the final consumer. The Distributive Guild
of the future will absorb them, relentlessly crushing out
their snobbery and obsequiousness.

VI. Distribution a Stage of Production

The conclusions to be drawn from the preceding
sections of this chapter are these :

(i.) Distribution, although most closely in contact
with the intimacies of life, is fundamentally an economic
process, the last stage of production, which only ends
at the consumer's door.

(ii.) But this contact implies a reciprocal relation.

DISTRIBUTION 75

and as the family and community are vitally affected,
it follows that the locality, composed of individuals
qua consumers, is entitled to representation in the dis-
tributive organisation.

(iii.) Aesthetic craftsmanship is rooted in locality, and,
accordingly, in the assertion of local interests we find
a guarantee for individuality and quality in production.

(iv.) To bring local government into line with
National Guilds, great structural changes are essential,
notably a more responsible parish life, and a larger
municipal area developing into a Province.

(v.) Existing retail organisation is chaotic and in-
adequate, and based upon the economic restrictions
inherent in wagery.

Can these factors be reconciled in the municipal
control of distribution .'' If the State be really the
representative of the consumers, why should it not
control distribution }

It is a material part of my argument that distribu-
tion is a stage, a phase, of production ; that the cost
of any commodity only ceases when it passes into the
custody of the consumer. That means that transit
enters into the cost of production, as is undoubtedly
the case. It therefore follows that if the State, acting
for its client the consumer, were to take control of
distribution, it must also, in part at least, control transit.
But the Transit Guild would be, beyond question,
one of the productive Guilds. The result would be
the re-entry into industry of the State, centrally or
locally, when not the least of Guild motives is to exclude
it from industry so that it may the more effectively
apply itself to more spiritual ends. A critic might
reply that the State could make equitable contracts
with the Transit Guild and yet control distribution.
I agree ; but the ensuing friction is not pleasant to
contemplate. The tendency to conciliate the consumer
by throwing all blame on the Transit Guild would be
irresistible. But that is the least of the objections.

76 NATIONAL GUILDS AND THE STATE

All the productive Guilds, from textiles to coal, would
naturally decline to put their products at the mercy
of an outside body, particularly the State, which might
be powerful enough to reimpose the vanquished domin-
ance of the consumer over the producer. They would
say that not for this had they abolished wagery and
established the producer's mastery over his own work.
If we seriously reflect on this, the only possible con-
clusion is that distribution must be recognised for what
it is — an integral part of production — and, accordingly,
the Productive Guilds must, through their own machinery,
deal with the consumer. To make the State a party
to the inevitable (and healthy) bickerings of producer
and consumer would be to weaken its moral authority,
and render it ineffective in its own sphere of action.
Organised local contact with distribution, yes ; control
over it, assuredly no.

VII. The Distributive Guild

The co-ordination of local supply must speedily
follow the formation of the productive Guilds. The
sale of their commodities by the most convenient and
companionable methods would obviously become urgent.
Not for ten unnecessary minutes would they entrust
the work to existing agencies. It is possible that, to
begin with, some of the Guilds might choose to open
their own shops and warehouses and sell direct to the
consumer. It is here that local consumers, through
local organisations, would prove their weight by pro-
testing against such a narrow-minded and short-sighted
policy. Apart from the fact that such diffused methods
are uneconomic, they would prove extremely incon-
venient to all the consumers concerned. Against such
a policy, even the local authorities might properly pro-
test. And not only on grounds of convenience : such
an absence of local co-ordination would preclude that
representation of the consumers which we agree is

DISTRIBUTION 77

essential to effective distribution. But I do not think
we need waste thought on such a possibility ; the success
of centralised selling is too palpable to be ignored. A
Distributive Guild is clearly indicated. One can picture
the representatives of this Guild meeting a Public
Purposes Committee of the local area to decide upon
location, local transit, and upon the architecture of the
Guild premises, not forgetting the lecture-hall, swimming-
bath, gymnasium, library, rest-rooms, and (if I live in
the neighbourhood) a secluded corner for a rubber of
auction and a billiard-table.

What shall be the constituents of this Distributive
Guild ?

First, all the productive Guilds whose goods it dis-
tributes will be represented on its Executive, or what-
ever its managing body may call itself. Reciprocally,
the Distributive Guild will appoint its representatives to
the directorates of all the productive Guilds. Secondly,
representatives from the municipal bodies on the manage-
ment in each area covered by the Guilds. Thirdly, con-
sumers chosen by the general body of customers. A
State municipal representative, too, I imagine on the
Executive.

But what will be the /ocus standi of the general body
of consumers } Every consumer ought to be a member
of this Guild by the payment of a nominal fee. Repre-
sentation upon the local and central authorities of the
Guild would, I suggest, derive from the business meetings
of these customers. We have the Co-operative Move-
ment before our eyes to know what to adopt and what
to avoid.

Finance ? That is the affair of the productive
Guilds. As the cost of distribution goes into produc-
tion, the producers must finance the cost of a pound
of tea until it is delivered at Mrs. Smith's home.
Alternatively, the Distributive Guild may arrange for
ample credits through the Guild banks. Theoretically,
I insist upon three points : {a) the control of produc-

78 NATIONAL GUILDS AND THE STATE

tion by the producer ; {b) that, in consequence, the
producer must finance distribution, either directly by
subvention or credit from his own Guild, or through
the Guild bank, which he controls ; and, as a logical
sequence, (c) the consumer should not be called upon
for a farthing of capital.

This third proviso brings us into collision with the
co-operative theory that the consumer should control
distribution, with its corollary that, if he is to control
it, he must finance it. Mr. and Mrs. Webb think that,
pending a transformation of society, the Co-operative
Movement can never exceed one-fifth of the national
production. I suspect that the real reason is that the
theory of consumer's control over distribution, to say
nothing of production, runs counter to economic law.
Not only economic law, but equity ; not only equity,
but habit and convenience. At the end of 19 14, there
were three and a half million co-operators who had
raised nearly ;^7o,ooo,ooo to compass an annual sale
of less than ;^i 50,000,000. Apart from such bad
finance, why should the consumer be fined so heavily
to procure the necessaries of life .'' It is a despairing
protest against the profiteering producer. It is not
that the co-operator really wants to control production,
of which distribution is the final stage ; he wants to
share in the producer's profits. So first he began on
distribution, and has gradually worked his way to-
wards actual production. When he started, it was the
cant of the period to proclaim the dominance of the
consumer. He naturally enough shouted with his
Manchester master. Fundamentally, he wanted to
be a producer. Even now, it is the producer who
controls the Co-operative Movement. All the 28,000
employees of the Co-operative Wholesale Society are
producers and not consumers. Of that number, nearly
17,000 are actually engaged on the productive stages
prior to distribution. Guild organisation will ulti-
mately absorb these. National Guilds and Co-opera-

DISTRIBUTION 79

tive theory are mutually destructive ; but we can catch
something of the finer spirit behind this movement,
finally adapting a large part of its organisation to the
service of the final consumer.

Do we verge on some perfectionist theory of life if
we anticipate that an organisation such as that I have
so faintly outlined will revive local life and turn its
activities into more fruitful ways ? Purged of profiteer-
ing, its wants supplied, its energies co-ordinated, pro-
ducer and consumer functioning each in his own sphere,
yet acting and reacting upon each other in mutual
effort to achieve some substantial happiness, a local
life so ordered need never lapse into torpitude. Particu-
larly do I contemplate the revival of the deserted parish,
once the germ of English national vitality. But whether
in small or large groups, it is reasonable to hope that
the correspondence established between production and
local life will kindle into flame the arts and crafts,
providing elbow-room for genius, searching it out and
sustaining it, so that beauty and pleasure may come
again and in the way they have always come, not to the
favoured few but to all folk, simple and gentle.

VI

FUNCTION AND THE CLASS-
STRUGGLE

It must be clear that no Report which sets out to secure " a
permanent improvement in the relations between employers and
workmen " can be consistent with the first principles of National
Guilds. We seek, not " a permanent improvement in relations,"
but the abolition of the wage-system and of a master-class. —
Vigilance Committee of the National Guilds League.

The genuine Socialist cannot fight against the working-class.
He must be with that class even when it blunders. — M. Lit-

VINOFF.

The functional principle implies a continual adjustment and
readjustment of power to the functions, and of the functions to
the values recognised as superior or more urgent. As all men, or
societies of men, will believe themselves to be capable of filling the
highest function, and will claim for this function the greatest
possible amount of power, it is not to be denied that the functional
principle will bring about a permanent struggle, and that only
eternal vigilance will prevent this struggle from relapsing into
war. More than once the difficulties inherent in the application
of the functional principle will cause men to lose heart and fall
into the temptation of abandoning themselves to liberal principles
and let the individual grasp the position he covets, or giving them-
selves up to authoritarian principles and let a tyrant re-establish
order as best he can. But in such moments of dejection the
memories of this war will act as a tonic. Men will recall that the
liberal principle let loose, in modern centuries, the ambition of
individuals, whilst when the liberal principle was corrected by the
authoritarian the worst of monsters was unbound : the dream of
universal monarchy, the real cause of world-wide wars. And
then they will realise that it is worth while going to the trouble

80

FUNCTION AND THE CLASS-STRUGGLE 8i

of binding the individuals, the authorities, and the nations in the
functional principle ; for only thus will it be possible to spare
the world the repetition of these horrors. — Ramiro de Maeztu.

L The Class-Struggle

In the preceding discussion on producer and con-
sumer, it is presumed throughout that the commodity-
valuation of labour must be rejected, or, in other words,
wagery must be abolished. Guildsmen, with damnable
iteration, must reiterate that wage-abolition is the
foundation of National Guilds. When, therefore, from
the inevitable mental confusion of the uninitiated
emerged the popular idea that the Whitley Report
was a practical acceptance of Guild principles, it was
imperative that Guildsmen, in no uncertain accents,
should proclaim the abyss that divided them from any
proposals that predicated the continuance of wagery.
The Vigilance Committee of the National Guilds League
were quick to assert that " we seek, not a ' permanent
improvement in relations,' but the abolition of the wage-
system and of a master-class."

It is here that we discover the germ of the class-
struggle. The class-struggle and not the class-war —
lutte de classe rather than guerre de classe. If we can
regard it in a detached spirit, we shall find that it is
not primarily a struggle for mastery of one class over
another so much as a struggle in classes to secure ever-
improving conditions. Thus, a Trade Union aiming
at higher wages is not consciously struggling to over-
come the master-class but merely to better the conditions
of the wage-contract. It taictly accepts the capitalist
system, yet continues its class-struggle. But the spirit
and direction of the struggle are changed when one
class consciously claims economic dominance over the
other, on grounds either of equity or function. The
class-struggle is ultimately transformed into a class-war
when capitalism, finding its function exhausted and its

82 NATIONAL GUILDS AND THE STATE

justification gone, resorts to a Capitalist-governed State
to maintain it in power, first by starvation, then, that
failing, by the police, finally, by military force. It is
not always easy to distinguish where the class-struggle
merges into the class-war. The struggle is unceasing ;
the war is sporadic. The difference may be expressed
in the terms static and dynamic.

Nor is the distinction merely academic. It is vital ;
for it involves the searching question whether we shall
settle our economic problem by a resort to reason or to
force. If the master-class, when faced with the settled
determination of Labour no longer to sell its labour
as a commodity, accepts the inevitable without further
demur, the struggle between class and class is ended
and a new struggle between function and function is
begun. Senor de Maeztu does well to remind us that
even this new struggle, happily conducted on a higher
plane, may, in its turn, degenerate into war. Eternal
vigilance is not only the price of liberty but of peace.

In so far as it remains a struggle — that is, follows
its normal course — we can apply our critical or con-
structive faculties to the processes of life, with such
social or economic changes as reason or influence may
determine. But when war begins, law and reason
lapse, and the gods decide whether we are to pass into
a better ordered society, or into anarchy and chaos.
When war begins, not only does reason fly the field,
but the finer and more nicely balanced issues disappear
into the black and white of the war chess-board. Each
man must decide on which side he will fight ; his intel-
lectual reservations must remain in suspense. This,
I presume, is what M. Litvinoff means when he says
that no Socialist can fight against the working-class,
even when it blunders. But if he means that in normal
circumstances we must support the working-class,
right or wrong, then one cannot dissent too strongly. It
would be the justification, long sought, of the nationalist,
with his discredited motto, " My country, right or

FUNCTION AND THE CLASS-STRUGGLE 83

wrong." In a class-war, we have a confrontation of
classes, aligned on an economic basis ; but the normal
struggle involves other considerations, not least a
patient exploration of the principles of society and a
constant revaluation of function. The need for this
becomes clear even in the titanic class-war now raging
in Russia, the dominant faction being represented
in England by M. LitvinofF. M. Nikolai Rubakin,
a popular Russian author, writes in glowing terms of
the Maximalist revolution. We are told that " the
whole of Russia has transformed herself into the most
absolute democracy in the world, as we must acknow-
ledge, even if we take the anarchy into account. Russia
is at the present time covered with a network of
every possible germ-cell of self-government — Councils,
Committees, Commissions, etc., for the greater part
based on universal, equal, and secret franchise. . . .
A number of Agrarian Councils, which are chiefly
composed of simple peasants, many of whom cannot
read or write, but are, nevertheless, showing them-
selves capable of grasping the most complicated agrarian
questions with extraordinary exactitude, and who
approach this cause as though it were a religious
ceremony, are working out the material form for an
unprecedented system of agrarian reform." Even the
factories are feeling the effects of the new regime, the
eight-hours day, and even the six-hours day, being
adopted. A cataract of intellectual life has been loosed,
flowing over the broken dam of Tsarism. All of
which strengthens the democrat in his belief that de-
mocracy is the reservoir of spiritual and economic power.
But M. Rubakin begins to doubt. "Every one demands
something, every one speaks of rights, but scarcely any
one speaks of duties." If for " duties " we read
" functions," we begin to realise that blind support
of the working-class, even when it blunders, may
become a subtle form of infidelity. Without inquiring
too closely into the persecution of Kerensky, or the

84 NATIONAL GUILDS AND THE STATE

suppression of the Constituent Assembly, we are not
far wrong in assuming that a class-war relentlessly
waged without a real appreciation of function or duty,
waged purely on class lines, may bring disaster in its
train. The National Guildsman may pointedly add
that the Soviets, being industrial bodies functioning
in the alien sphere of politics, brought the Germans to
the gates of Petrograd.

The conclusion is that the class-struggle does not
comprehend all the activities, and must be related to
life as a whole if its fruits are not to turn to bitterness.

II. The Capitalist Defence

We are compelled, on this train of reasoning, to
inquire whether any good thing can come out of the
master-class. Is its purpose purely that of exploita-
tion, or do more permanent functions inhere in it .''
Is it the creature of historic development, or has it
consciously and purposely guided events to its own
aggrandisement and to the horrors of existing social
conditions .'' If the answer to this last question is in the
affirmative, then it is a criminal conspiracy, a predatory
combination, calling for merciless extirpation.

For my part, I am not minded to quarrel with history.
Capitalism was originally a reaction from the inertia
of the mediaeval guilds, subsequently stimulated by
feudal oppression. It was the child of its period, and
it seems futile either to praise or condemn it. If I
were its apologist, I could make out a tolerably good
case for it, from its inception down to yesterday. It
has a record of great achievements to its credit, even
though it has cut a swath of mutilated men, women,
and children, and left a trail of unspeakable cruelties.
Upon its inherent vulgarity, its debasement of moral
and intellectual life, it were superfluous to enlarge.
The business man of to-day stands morally in a low
grade. His banker's reference is no criterion of char-

FUNCTION AND THE CLASS-STRUGGLE 85

acter. Yet there he stands, not quite so dominant as
formerly, more than a Httle puzzled, but still undaunted.
The capitalist rests his^ defence on two grounds :
(a) that he has led, managed, and ventured ; that for
his leadership and management he is entitled to re-
muneration and to profits commensurate with his risks ;
and (b) that whatever he has done, whether good or ill,
whether cruel or human, he has had the sanction of law
and public opinion. The second ground seems indis-
putable, particularly when we remember that even the
exploited working-classes have not until recently funda-
mentally disputed his claims, accepting the wage-system,
without protest parting with the product of their labour
to the capitalist in exchange for the commodity price
of their labour. But law and public opinion may with-
draw their sanction, and, consequently, that defence
may be penetrated ; is, in fact, already pierced in more
sectors than one. It is, then, to the first defence we
must look if we are to discover any continuing function
of social value in the master-class. Is it true that he
has led and managed ^ It is. But is it true that leader-
ship and management are his monopolies .'' It is not ;
but it is true that circumstances have developed these
faculties in the master-class when circumstances have
precluded or retarded their development amongst the
wage-earners. One has had the training ; it has been
denied to the other. Allowing for many exceptions,
it is the training of an hereditary caste. Now, whether
we like it or not, management is a function, and if
generally it reside in the existing master-class, it can
hardly be denied that the functional principle cuts
across the class-struggle, to the extent that Labour
depends upon management, to the extent that, in the
transition to the new order of society, management
can be separated from exploitation and utilised in the
public interest. The Labour guns must be levelled at
exploitation ; if they destroy management, they may
retard the economic change we seek : may, by the lack

86 NATIONAL GUILDS AND THE STATE

of efficient management (as in Russia to-day), create a
reaction, and so defeat the purpose of the revolution.

In this connection, it may be well to note carefully
the growing importance of a function in itself. Mr.
Sidney Webb has recently been trying to define it.^
" What we are concerned with here, whether we are
considering any grade of managers or superintendents,-
is the quite distinct profession of organising men — of
so arranging and dictating the activities of a band of
producers, including both brain-workers and manual
workers, and to create amongst them the most effec-
tive co-operation of their energies in achieving the
common purpose. What the manager has principally
to handle, therefore, is not wood or metal but human
nature ; not machinery, but will." " In my opinion,
the profession of the manager, under whatever designa-
tion, is destined, with the ever-increasing complication
of man's enterprises, to develop a steadily increasing
technique and a more and more specialised vocational
training of its own ; and to secure, like the vocation of
the engineer, the architect, or the chemist, universal
recognition as a specialised brain-working occupation."
Nor is the manager to be concerned with profiteering ;
his skill is to be applied without regard to profits and
losses ; " his concern is primarily with output, not
profits." And so we come to Mr. Webb's conception
of the efficient works-manager : " He who makes his
industry efficient in quantity and quality of product
in comparison with the human effiDrts and sacrifices
involved."

Whilst, therefore. National Guildsmen cannot com-
promise with the wage-system or with a master-class —
both have outstayed their welcome — we have not been
unmindful of the non-manual functions, and have de-
clared that there is both room and welcome for them
in the National Guild. Here, nascent, is the func-
tional principle, but, as yet, juridically untecognised.

1 The Worh Manager of To-day (Longmans, Green & Co.).

FUNCTION AND THE CLASS-STRUGGLE 87

in. Class Deposits

Apart from the definite economic function of manage-
ment, is there no other deposit of social value in the
master-class ? It would be monstrous if, after genera-
tions of control not only of industry, but of education,
of access not only to wealth but to culture, the governing
classes should bring nothing in their hands but a certain
skill in management. Such a result would prove the
intellectual bankruptcy of the nineteenth century. Have
we not heard it said that the triumph of economic demo-
cracy would mean the starvation of the arts and sciences ?
Is not this at bottom the Conservative, as distinct from
the Liberal, defence of the existing system .'' But I
need not labour the point, because we can hardly deny
to the British governing classes a certain quality, as inde-
finable as manners — personality.

The close observer might with truth remark that the
rich and favoured of Great Britain have been criminally
negligent of their intellectual opportunities ; that their
mentality is something to seek. In my own experience,
in cosmopolitan company in various parts of the world,
I have too often found the Englishman less mentally
equipped than Frenchman, German, or Spaniard. But
almost invariably he carries most weight by investing
his platitudes with personality. There was a time, not
far distant, when even that quality seemed to be dis-
appearing. The younger generation of the wealthier
classes, released from the responsibility of manage-
ment, their funds in joint-stock companies, either fre-
quented clubs and race-courses, or scoured the world
in search of game, furred or feathered. There was a
noticeable increase of intellectual vacuity and moral
slackness. If the war has done nothing else, it has
toned up our officer class, which is broadly representa-
tive of social and political power. There has been an
accession of personality amongst the officers and of

88 NATIONAL GUILDS AND THE STATE

discipline amongst the rank and file. But let the
masters beware : discipline is not docility ; may, if put
to it, trample upon docility behind barricades. In
mentality and exact knowledge I fancy a youth from a
council school is the superior of a youth of equal age
in Eton or Harrow. But in personality. . . .

With something so intangible, it may be best to
illustrate. Here shortly are the life-stories of two men
of equal age, and both friends of mine.

John Temple is the son of a prosperous merchant.
He was born into a comfortable home, surrounded by
a religious atmosphere, and early subjected to regular
habits. He was sent in due course to a public school,
where he was simply but plentifully fed, and went
through the usual curriculum, partly classical, partly
modern. From the first, the ambition was sedulously
implanted to cut a gallant figure in outdoor sports.
He was practically always in training either for gym-
nastics, rackets, swimming, football, or cricket. He
developed the habits of good sportsmanship — courtesy,
chivalry, and loyal team-work. Above all, he was by
constant suggestion impressed with his future, in which
he would be the master of men, first in his own business
and later in politics and social affairs. To the power
of the purse were to be added uprightness, reliability,
consideration for his equals and those placed under
him. No weakness ; always strength of purpose.
Ideals, of course, so long as they were conventional,
but he must steadily guard against subversive notions,
which would have a disquieting effect upon his work.
This was best secured by keeping in with his own set.
Tone and good manners were essential.

Being destined for business, he did not go to the
University, but straight into the counting-house. The
death of his father prematurely weighted him with
responsibility. Alert and intelligent, he was quick to
see the importance of facts, of a true and reliable balance-
sheet, of the statistics of his trade and of the trades

FUNCTION AND THE CLASS-STRUGGLE 89

with which he dealt. That carried him to national
statistics and international problems. His business had
considerable connections with America. He was not
content to accept second-hand evidence of affairs across
the Atlantic, so accordingly we find him frequently
crossing, and not only transacting his immediate business,
but comparing notes upon management, production,
transport, trusts and control, and all the problems
incidental to commerce. He had learnt at school the
value of team-work, so it was hardly surprising to find
a profit-sharing scheme adopted. His family training
had taught him not merely the value but the duty of
sympathy with those in trouble. He adopts a bene-
volent scheme and personally visits his employees when
sick. An employee, on the birth of a child, finds a five-
pound note in his pay envelope. It is hardly sur-
prising that he secures the enthusiastic support of his
staff and workmen. " Mr. John " has a way with
him.

His position established, he marries a woman of
character, who regulates his domestic concerns and
seconds his efforts, whatever they may be. He devotes
time to his children, teaches them games, and attaches
them to him. It is all done systematically. He sees
ahead a clear six months of comparative quiet. Trade
is normal, demand and supply about balance each
other, prices are steady. So he buys the latest and best
guns and rifles, and camp outfit, and all the parapher-
nalia of a hunting expedition. He gives personal
attention to every detail. At Nairobi he is equally
particular in choosing his head-man and the long string
of porters. He comes back with exceptionally good
specimens, which you may see in his hall and study.
When the war comes, he promptly offers his services
to the Government, and he is there to-day, without
salary or self-seeking.

As the years fly past, his friends learn to trust him,
seek his advice, lean upon him. He does not dis-

90 NATIONAL GUILDS AND THE STATE

appoint them. Always he is so busy with one thing
or another that somehow he finds no time to open a book,
to weigh an idea, or to stimulate his imagination.

Of the economic value of his managerial function
there can be no doubt. Is his personality the product
of his class environment and valueless in a new
society .''

My friend Tom Wilson has a very different history.
He is the son of a carpenter, and was born in a jerry-
built house in a mean street of an industrial town. His
parents were Nonconformists, and did their duty by
their son. When he could toddle he played on the
pavement, and sometimes his father or mother would
take him to the park. All too soon, he was sent to an
infant school (he was less of a drag upon his mother
there), later to the Board and to Sunday school. Tom
never experienced actual poverty, but, when his father
was unemployed or on strike, he went on short com-
mons. He left school at the age of thirteen, and became
message-boy for the grocer, who was deacon at the
chapel. For six months he brought his mother home
two-and-six a week, later five shillings. He occasionally
got a penny or two from the customers, which was
spent as boys spend pennies. At fifteen his father
apprenticed him to a trade ; at eighteen he was an
improver, at twenty a journeyman. Separated by
this time from his parents (capitalism breaks up family
life), he was lonely and uncomfortable in " digs," and
soon began " walking out " with a comely girl, whom
he soon married. He had already joined his union,
attending the branch fairly regularly.

Each Saturday morning Tom would allot so much of
his wages to rent, so much to the Oddfellows, so much
to the Prudential, so much to beer and baccy, so much
to his union, the rest to his wife. His beer and baccy
money and his union subscription he would pocket, his
wife disbursing the rest. I remember once when visiting
Tom on a Sunday afternoon that his wife opened a

FUNCTION AND THE CLASS-STRUGGLE 91

cupboard door, showing me little envelopes in which
the money was separated as she and Tom would arrange.
There was no spare money.

The trade union branch meeting was a weekly event
with Tom. The business was generally tedious, but
he would talk of other things with his friends. In time
he was appointed to some office, and gradually grew
in influence. He was steady and reliable ; his mates
trusted him.

About this time he read Bellamy's Looking Backward
and Blatchford's Merrie England. He joined the I.L.P.
He did not like the S.D.F., which he regarded as
irreligious ; there was something hard and unsym-
pathetic about it. At election times, whether Parlia-
mentary or municipal, he would draw five shillings
from his savings as a subscription to the funds,
and spend all his spare time working for the Labour
candidate.

In this wise, Tom has spent the years. He is the
same age as John Temple, but is physically twenty
years older. His employers have drawn out of him his
surplus energy. At night he reads a page or two from
some book, or the Labour Leader or Reynolds, but , he
is generally fatigued, and the " hooter " hoots at six
o'clock in the morning. So he is in bed by ten o'clock
as a rule. On Sunday he lies on till nine o'clock, has a
leisurely breakfast, and so to chapel.

Tom's life, if you measure it in self-denial, is more
heroic than John Temple's ; but it is infinitely more
circumscribed. Where Tom Wilson thinks in shillings,
John Temple thinks in thousands. Tom Wilson turns
over ;£ioo a year, John Temple ^^i, 000,000. Yet
Tom, too, has personality, very attractive in its modesty
and quiet endurance. But John Temple has capitalised
his personality, whilst Tom Wilson's has gone into his
work, as though it were nothing.

The truth is that the new society will have no use
either for John Temple or Tom Wilson in their existing

92 NATIONAL GUILDS AND THE STATE

capacities — the one a master, the other a wage-serf.
But when we remember the devitalising effects of capital-
ism, its moral and intellectual debasement of the master,
its physical and social debasement of the servant, we
shall discover that our national wealth in personality has
depreciated ; that we cannot afford to disregard per-
sonality wherever it can be found. What must be done
is to throw both the master and proletarian personalities
into the melting-pot. The resultant amalgam will pro-
foundly affect the future destinies of our own country and
the world.

IV. Personality in Work

The foregoing is the first and not the last word on
personality. National Guildsmen have something more
specific to say upon it. It is their contention that the
commodity valuation of labour, by ignoring personality,
strikes at the worker's most sacred possession. When
the worker recovers it in enfranchised form, when he
knowingly puts it into the product (from which he is
no longer divorced by the wage-payment), a new era of
qualitative production will be begun. Even those who
are engaged on production which is necessarily quantita-
tive, if denied the joys of craftsmanship, will nevertheless
compensate themselves in procuring as consumers the
best of the craftsman's skill.

V. Subjective Rights

Nothing here written must obscure the plain fact that
the class - struggle is the dominant element in social
statics, as is the class-war in social dynamics. But an
examination of certain qualities in certain classes causes
a doubt whether there are not other factors to be taken
into account, other principles that transcend the purely
economic theory of class confrontation. Creates a
further doubt, if Senor de Maeztu will forgive me,

FUNCTION AND THE CLASS-STRUGGLE 93

whether these qualities, although " subjective," residing
in the individual, may not be found to be social " objects,"
things in themselves, possessing " primacy." Even if
we declare the " primacy of things," recognise that men
cluster like bees round some " thmg," be it a football
or a church dogma, from whence all associations arise,
our doubts are not resolved. If a church dogma be a
" thing," so also may be personality or liberty. Amongst
the " ends " or " things " sought by education (itself
an instrument) are personality and the development
of potential citizenship. Certainly I can conceive an
association seeking personality or liberty, not by the
assertion of subjective rights, but in an objective spirit
and with an objective end.

Let us then consider the case of a deposed master-
class. Let us assume that this class possesses faculties
of social value, the gift of management, personality, or
what not. Let us still further suppose that this class
retires upon what compensation equity grants it (always
remembering that not one farthing of compensation Is
paid for the loss of the control of the labour commodity),
retires and sulks, declining all assistance to the new
regime. The community assuredly will have something
pertinent to say to these pocket Achilles. This, perhaps :
" Gentlemen, you are the inheritors, and still inherit
(even though dispossessed of economic power) qualities
and faculties acquired by your class at our expense.
You must act as men and not as sulky babies, and we
accordingly expect you without further nonsense to put
all your capacities, which we require, at our disposal.
Your refusal will be a crime, and the punishment will
not be to your liking." What if they become con-
scientious objectors .''

The question of personal liberty is raised. These
conscientious objectors, in eflFect, say that they must
have full liberty " to grasp the position they covet," or to
stand idle, or even to conspire for the counter-revolution.
No doubt there is something in this of the liberal principle,

94 NATIONAL GUILDS AND THE STATE

even though we must not forget that Liberalism has no
monopoly of liberty or the concept of liberty. Broadly
put, and allowing for recent changes in the temper of
Liberalism, the liberal principle still stands for only such
restrictions of personal liberty as are necessary to the
maintenance of the power that guarantees the liberty.
Senor de Maeztu's alternative principle is to bind
individuals, authorities, and nations in definite functional
activities, and to establish juridical power, backed by
force, to maintain it. It seems difficult to deny the
proposition that the end is greater than the association ;
that " rights arise primarily from the relation of the
associated to the thing that associates them." My
difficulty is not to deny the truth of this, but to discover
its limits, to ascertain how far, if carried to its extreme,
it may infringe upon other principles equally precious in
human association. But so far as its economic application
is concerned, it justifies resort to compulsion where there
is non-compliance with the assignment of functions in
the public interest. I see no infringement of personal
liberty in compelling men to return to the community
what they and their ancestors have received from the
community. This is not the negation of personal liberty,
but the necessary nurturing of the commonwealth in
which personal liberty thrives.

In the light of history, who can doubt that it has been
the assertion of subjective rights, through the media of
monarchy, economic power, law or custom, that was the
predisposing cause of the great human tragedies ?
Democrats would be foolish or worse to let continue
an order of society which permitted subjective rights to
function to the detriment of mankind as a whole. I do
not doubt that it will find in the functional principle an
instrument of escape. But let us beware lest in driving
out one devil we admit another. I shall not argue, but
only assert that personal liberty, restricted but protected
by law, has been of priceless value in the body politic.
That the functional concept clashes with the concept of

FUNCTION AND THE CLASS-STRUGGLE 95

personal liberty is assumed, rightly or wrongly. I can
see it so wisely applied that personal liberty is enlarged ;
so peremptorily applied that we may find ourselves the
victims of a mechanical tyranny no less galling than in
the days when subjective rights held sway.

VII
NATION, STATE, AND GOVERNMENT

In the most formal manner, now, we assert that the material
of all the Guilds ought to be vested in the State ; the monopoly
of the Guilds is their organised labour power. — National Guilds.

Broadly stated, these are the reasons for our belief that the
State, with its Government, its Parliament, its civil and military
machinery, must remain independent of the Guild Congress.
Certainly independent ; probably even supreme. That will
ultimately depend upon the moral powers and cultural capacity of
the nation's citizens. Having solved the problem of wealth pro-
duction, exchange, and distribution, we may rest assured that a
people thus materially emancipated will move up the spiral of
human progress ; that out of this movement will grow a purified
political system, in which statesmanship will play its part. —
National Guilds.

The problem of the modern State is to give free play in their
appropriate environment to the economic and political forces
respectively. We have seen that they do not coalesce ; that,
where they are intermixed, they not only tend to nullify each other,
but to adulterate those finer passions and ambitions of mankind
that ought properly to find expression and satisfaction in the politi-
cal sphere. . . . With the achievement of a healthy national
economy, the problem of statesmanship will be to transmute the
economic power thus obtained into the highest possible social and
spiritual voltage. — National Guilds.

We can act in so far as we have knowledge. Volition is not
the surrounding world which the spirit perceives ; it is a beginning,
a new fact. But this fact has its roots in the surrounding world ;
this beginning is irradiated with the colours of things that man has
perceived as a theoretical spirit, before he took action as a practical
spirit. — Benedetto Croce, Philosophy of the Practical.

96

NATION, STATE, AND GOVERNMENT 97

In every man there is at once the solitary and the citizen.
The solitary escapes not only the power of the autocrat, but the
power of the community as well. The citizen and the city,
however, are one and the same thing. — Ramiro de Maeztxj,
Liberty, Authority, and Function.

What is a State ? A State is nothing more or less than the poli-
tical machinery of government in a community. — Mr. G. D. H.
Cole.

The problem, I admit, cannot be left where it stands : if the
old Sovereign of Collectivism and the rival Sovereign of Syndicalism
are alike dethroned, it remains for Guild Socialists to affirm a new
and positive theory of sovereignty. — Mr. G. D. H. Cole.

The future of society does not depend merely on the play of
the material forces which Mr. [J. A.] Hobson sets out in order of
battle ; a new moral world is in formation, and fresh creations of
the soul and intelligence of men are arising to people it. — The
Nation.

I. Some Theories of State

The industrial reconstruction implied in National
Guilds obviously involves a corresponding change both
in the theory and structure of State and Government.
The control of production, implicit in Guild organisation,
with its correlative problem of the status of the consumer,
has already induced two theories amongst National
Guildsmen, both profoundly affecting, each in its own
way, our conception of the State and its administrative
arm, the Government. The one school sees in the
State the natural protagonist of the consumer, evolving
in consequence a theory of co-sovereignty, a balancing
of political and economic power, out of which " the
individual hopes to be free." " If the individual,"
says Mr. Cole, " is not to be a mere pigmy in the hands
of a colossal social organism, there must be such a division
of social powers as will preserve individual freedom by
balancing one social organism so nicely against another
that the individual may still count." The other school
sees the spirit eluding any such mechanical balance, even
if it could be adjusted, and looks to a new conception
of the State, as the sovereign expression of citizenship ;

H

98 NATIONAL GUILDS AND THE STATE

not, to be sure, a metaphysical entity, but an organised
power released from economic entanglements, and,
therefore, free to apply unhampered those metaphysical
or spiritual principles which mark an emancipated
people. It will be part of my task in this chapter to
discover whether these two theories, both logically
argued from different premisses, may not be reconciled
in a higher synthesis.

Whilst these two divergent theories are in the minds
of National Guild smen, there are other schools who have
already condemned the State, not only as an evil thing in
itself and repugnant to democratic principles, but as the
sword and buckler of the privileged classes, and possess-
ing no other function whatever. Certainly, the State has
a sinister reputation to live down. The overwhelming
mass of the workers know it only as an organ of
oppression, arrogantly assuming autocratic power under
the guise of political democracy to subserve plutocratic
ends. Its outward forms, its mock-majestic ceremonials,
its sumptuous courtliness, its aspects of polished
ignorance, its graceful indifference to reality, or, rather,
its apparent acceptance of life as " une charmante
promenade a travers la realite" its affectation of leisured
ease spent " in the perfumed palaces of the great, under
the canopies of costly state and lulled to sleep with
sounds of sweetest melody " — all these glittering trap-
pings under the attrition of war and the pressure of
political necessity grow shabby and less deceptive.

The drab administrative side of State life, hitherto
hidden from the public view, is also coming under
scrutiny. For not only do National Guilds predicate a
vast devolution of the work now done by the Bureaucracy,
but the functional principle involves a new analysis of
bureaucratic activities, and, as we shall see, a re-state-
ment of the relations between State and Government.
" The political thought of the last few decades," says
Senor^ de Maeztu, " has been so concentrated upon
disputes between Capital and Labour that it has not

NATION, STATE, AND GOVERNMENT 99

considered the problem of Bureaucracy as the problem
of an autonomous social class, with specific interests of
its own." After reminding us that Marx regarded the
executive power of States as " a committee for managing
the common affairs of the bourgeoisie," he defines the
views of Bureaucracy held by the Katheder-Sozialisten
in Germany and the Fabians in England as " the
instrument of Divine Providence for the solution of
social problems," and proceeds : " What neither party
had noticed, but what a few isolated voices had declared
here and there to be a fact, was that the supremacy
of the Bureaucracy was nothing more, primarily and
essentially, than the supremacy of the Bureaucracy."
We must accept this thesis with reserve. Of the power
exercised by the Bureaucracy there can be no kind
of doubt ; but is it a power inherent in Bureaucracy,
or is it a power otherwise derived which finds in the
Bureaucracy its most powerful support .'' The soldier
of fortune may grow so powerful that he can jump the
legitimist claim ; the manager of a business may make
himself so indispensable to his employer that he may
force a reluctant partnership. In both these instances,
however, it is evident that the power is only formally
granted with the change of status ; until that is effected
the soldier remains a mercenary, and the manager a
servant, the power, formal though it be, residing else-
where. However dangerous argument by analogy may
be, it holds true, I think, in this case. The moment
Bureaucracy discards its warrant as the disciplined
instrument of administration, a constitutional revolution
is accomplished, and Democracy formally abdicates.
But this is not the course that events are taking. The
battle is being fought over the heads of the Bureaucracy,
which now contemplates, not the usurpation of sovereign
power, but a change of allegiance. Subject to the fresh
light thrown upon the problem by the functional principle,
a debt we all owe to Seiior de Maeztu, I see no reason
to modify what I wrote in 1 9 1 2 : " The advent of the

loo NATIONAL GUILDS AND THE STATE

Guild does not mean the departure of the bureaucrat,
but it involves a change of heart and a sharp turn from
the traditions of his order. Although by birth, breeding
or education, his life and sympathies are bound up with
the governing or plutocratic classes, he, nevertheless, is
not a man of large means. He protects the plunder of
his social associates ; he seldom shares it. He is the
poorly paid tutor in the rich man's mansion, in the
family but not of it ; he is the eunuch in the palace.
... It is a commonplace that the expert is a good
servant but a bad master : so also is the bureaucrat.
When, therefore, economic power is transferred from
private capitalism to the Guilds, the whole spirit of
bureaucracy will be subtly changed. It will cease to
be an instrument of administrative oppression ; it will
revolve round a new axis and in a new atmosphere." ^

We must carefully distinguish between the power
acquired by bureaucracy as an organisation — a power
which it properly shares with all professional associations,
and in accordance with Guild principles — and the powers
adventitiously thrust upon it by the existing confusion of
functions exercised by the State, as an entity in itself,
and the Government, as the administrative organ of the
State. We cannot refuse to Civil Servants the same
rights of self-government that we grant to industrial
organisations or to teachers or doctors ; but we must
ascertain how far the powers acquired by the bureaucracy
can be restrained by^ definitely binding it to precise
functions. But these remain indefinable until we have
first examined and settled the exact relations to be
established between the State and the Government.

I do not know to what extent modern theorists have
considered the vast changes in the Governmental machine
caused by the departure from laissez-faire during the
past generation. Any such study must take into its
purview the extension of municipal activities. The
general impression made upon my mind by these changes

' National Guilds, p. 224.

NATION, STATE, AND GOVERNMENT loi

is that we have lost whatever conception we had of the
different sanctions attaching to State and Government ;
that the two terms have become almost indistinguishable.
Thus, we have Mr. Cole defining the State as the political
machinery of government. This seems to me to make
the greater the servant of the less. My own conception
rather leads me to the conclusion that the Government,
in all its ramifications, derives its authority from and
must ultimately have its functions defined by, the State,
which I regard as the organised expression of citizenship,
and, therefore, the sovereign authority.

If, however. State and Government are Siamese twins,
of equal power and vitality, then I can understand, and
even sympathise with, the other school of thought to
which I have referred — the Marxian School which sees
a State and Government as a unit unchanged and un-
changeable in its determination to exercise power in the
interests of the privileged classes.

II. Citizenship

The term " National Guilds " presupposes a nation ;
a nation remains inarticulate without the State as its
vocal organ ; the State, in its turn, is impotent
without governmental machinery to give effect to its
policy and purpose. That machinery will naturally be
simple or complex in correspondence with the simplicity
or complexity of the communal life. But just as the
State derives from the national consciousness, so the
Government obtains its sanction from the State. In a
pure democracy, it is evident that all three entities would
respond harmoniously to each other, the State voicing the
sentiment of the citizens, the Government administering
affairs in obedience to the Executive Authority. A
trinity in unity.

If we could detach the Nation from the State, we
should find it little more than a complex of ideas, the
fruit of tradition, history, art, literature, and that pervasive

I02 NATIONAL GUILDS AND THE STATE

sense of national spirit and consciousness that springs
from a life lived in common through many generations.
We may welcome or deride national sentiment ; we
should certainly be foolish to deny its existence or to
disregard it as a dominant factor in the affairs of
mankind. It is, however, easier to sing about it, or
even to die for it, than to define it. Mazzini laboured
at the problem, and, finally, got little further than the
aphorism that fellowship is life, and lack of fellowship
death. We know, too, that the forcible denial of national
life intensifies the sentiment and never kills it. Ireland
is the classic instance. For seven centuries, its national
claims have been not only denied but brutally abused,
with the result that to-day the sense of nationality is
more than a preoccupation, it is an obsession, exhausting
to itself and dangerous to the British Empire. On the
other hand, a national sense that remains sovereign in
quality may soar high in art and ideas, as in the
Greek Republics, or, caught in the ever-widening net
of industrialism, may develop into a degrading Imperial-
ism. The sense of nationality penetrates all our problems;
we cannot escape it. I would not if we could. Con-
fronted with the poignant drama of the war, I see beyond
these voices an even greater national soul - adventure,
when the nations, each according to its spirit, seek to
apply the lessons of the war to world-problems. The
solutions of these problems will be permanent or tem-
porary as we obey the spiritual promptings of the highest
citizenship.

This citizenship, this sense of nationality operating
in the individual consciousness, is the greatest fact in the
life of a democratic people. As the greater contains the
less, so citizenship contains and comprehends the lesser
motives and interests. These motives and interests,
important though they be, must ultimately merge into
the will of citizenship, realising in it the sovereign
power. It is not mere rhetoric when we counter " the
sovereign will of the monarch " with " the sovereign

NATION, STATE, AND GOVERNMENT 103

will of the people." It is a declaration of democracy.
It envisages no balance of power ; it knows no checks
or counterpoises ; it is an ultimatum that the will of
the citizens, in their civic capacity, shall prevail over
every sectional interest, economic or functional. Its
decision is the greatest of national sacraments.

A moment's reflection, however, will convince us that
the citizenship here prefigured must not be subjected to
an industrial system that robs it of economic power.
That means the continuance of " passive " citizenship ;
it is only when the citizen controls his own labour-
power, through the Guild monopoly of labour, that he
can achieve a real, as distinct from a political, democracy.
Broadly stated, the Western nations recently at war with
Germany are political democracies, yet their " active "
citizenship is as yet embryonic. Apart from their
material and immediate advantages, the social value of
National Guilds is that they complete the process of
democratisation. The " passive " citizen already politi-
cally enfranchised finds final freedom when released from
the servitude of wagery. Thus enfranchised, his mind
is also released from the anxieties of the daily wage, and
consequently is free to deal with the larger problems
that confront him, not as a wage-slave, but as a man
and a citizen. Economic freedom is, no doubt, an end
in itself ; but, when viewed in perspective, it is a minor
operation in the campaign for a richer and more complete
national and personal life.

III. Administration

Assuming, without further argument, the reality of
national life and sentiment, the next step is to discover
the organism through which it expresses its sovereign
will. On every ground, historical, constitutional, legal,
practical, the State is properly and inevitably that organ.
The assumption that underlies most anti-State criticisms
is that the State changes neither in form nor purpose ;

I04 NATIONAL GUILDS AND THE STATE

that it is to all intents and purposes the same State that
ruled in the days of absolute monarchy, the same State
that ruled under a limited monarchy, the same State that
to-day rules in the interests of the plutocracy. It is not
the same State in many vital particulars ; the political
franchise has influenced State affairs in many directions,
but all these States have had one thing in common :
their policy has been based on the exploitation of labour.
And if a Labour Government were installed to-morrow,
as recently in Australia, the same policy would prevail
unless the wage-system were abolished, and National
Guilds instituted and recognised as the organised
monopolies of labour-power.

Yet another important change in our system of
government must be noted, and its effects considered.
In recent years there has been such an extension of
government in the economic and municipal life of the
nation that it is now extremely difficult to know where
the Executive ends and the Administrative begins. In
1893, when the Executive determined to intervene in
the matter of unemployment, it got no further than a
circular from the Local Government Board recommend-
ing certain relaxations of the Poor Law. To-day, a
policy would be forced on the local authorities by ukase.
In like manner, the Home Secretary reserves large
powers of initiation by way of Orders in Council. We
have in these and many similar cases a curious confusion
between the Executive and Administrative authorities,
wherein functions are disregarded or overridden. The
result, generally stated, is that we have no clear differ-
entiation between the State and the Government, the
Government being properly the administrative organ.
But this confusion of function has precedent behind it ;
it is the sequel to the monarchical regime, which knew
no distinction between the State, which in those days
represented itself and not the nation, and the govern-
mental organisation, which was only concerned to give
effect to State policy. If, however. Democracy supplants

NATION, STATE, AND GOVERNMENT 105

Autocracy (however tempered by the modern spirit),
it follows that we must recast our whole system of
government, and recognise the fundamental distinction
between the State, as the mouthpiece of citizenship,
and the Government as the organisation that works out
in detail the will of the citizens expressed through the
State.

An important deduction follows from the concept of
the State as the sovereign representative of Democracy :
that whilst the only function (if function it be) of the
State is to express the will of the people, the functional
principle must operate throughout every Government
Department, all functions being derived from the State.
But the democratic principle must also operate in
government, precisely as it would operate in the Guilds,
productive or civil. This is to say, that subject to the
function imposed, self-government in the Government
Departments must be fully conceded. The Guild
principle is just as valuable in the Colonial Office as
in the Post Office, in the Local Government Board as
in the Engineering Guild. All these associations are
composed of free and " active " citizens, and are only
limited by the four corners of the charter in which the
State defines their functions.

This confusion (which tends to grow) between State
and Governmental organisation accounts, I think, for
certain criticisms which have been made upon two
statements of mine upon the nature of the State. I
have asserted (a) that the business of the State is essentially
spiritual, and {b) that whilst it is the formal origin of
function, it is itself functionless. I shall deal with the
first point in the succeeding section ; in regard to the
second, I have already written that it is the function of
the State to act as the mouthpiece of the citizen body.
But, strictly, this is not a function, for the essence of a
function is that it can be so defined that its agents may
know precisely what they are to do and not to do. This
so-called function of the State is rather a mission, a

io6 NATIONAL GUILDS AND THE STATE

responsibility, a continuing task to interpret faithfully
the citizen will. That and more : for it ts given the
power by law, and in the last resort by force, to impose
the citizen will upon any recalcitrant individual or section
of the community. That is why the military and naval
forces owe allegiance to the State and not to the Govern-
ment : need only obey the Government when satisfied
that it acts with full State sanction. Fundamentally, this
is why a citizen army must supplant the professional
army. Military science and the maintenance of cadres
are doubtless administrative functions ; but the army to
fight with must be consciously of citizen origin, con-
sciously and deliberately in harmony and touch with
citizen sentiment. In like manner, the judiciary, from
the highest judge to the most insignificant magistrate,
owes allegiance to the State and not to the Government :
can only support the Government, in any of its acts
by any of its departments, if the Government function
be neither exceeded nor abused. It is a high crime
and misdemeanour if and when the Home Secretary
circularises or otherwise communicates his views to
judges or magistrates upon cases about to be tried.
Strictly, it is treason, for it is the assumption by Govern-
ment of the State prerogative.

If the distinctions here drawn between State and
Government are the merest elements of constitutional
law, they are, nevertheless, not only necessary to my
argument, but peculiarly valuable to bear in mind at the
present moment. We hear to-day a great deal too much
of democratic administration, of Labour representatives
acting upon this or that administrative committee, of
local opinion being consulted or represented, of trade
representatives to give expert advice. There is nothing
of democracy in this : rather the reverse ; it is the
exploitation of the democratic idea by a non-democratic
governmental organisation, which retains the power and
devolves the responsibility. Democracy without power
is a contradiction in terms ; it is the egg-shell without

NATION, STATE, AND GOVERNMENT 107

the egg. You cannot have a democratic administration
without a democratic State, because the power adminis-
tered comes from the State. The problem, therefore,
for all Democrats, not least National Guildsmen, is to
seek full citizen power and ensue it. That nice balancing
of power, those checks and counterpoises, that Mr. Cole
desiderates, are administrative problems, belonging to
the category of functions, but always subsidiary to the
final, and, therefore, the sovereign, power of the State,
the effective organ of citizenship. But I will add that,
so far as Mr. Cole has in mind the right balancing of
functions, he is on solid ground. Preponderant or
underweighted functions in government are not only a
prolific source of friction and jealousy, but a sure way
to defeat, by obstruction and in detail, the policy and
aims of a democratic State. He is further in the right
of it when he afErms the need not only of a balance of
functions but a multiplicity of associations that the
individual may be released from the inertia of vast
organisations. But the sovereign power rests, sans
phrase^ in democratic citizenship.

In due course, I must consider the relations of
National Guilds and the Guild Congress to the State
and the Government, and ascertain the exact stress of
economic or Guild power upon the two structures. I
am now concerned with the relations between State and
Government. There would seem to be at least two vital
distinctions between them : {a) that in the State resides
the power derived from the general body of citizens, and
that the Government organisation remains subject to
this power ; and {b) that the Government is a functioned
body in all its parts, whilst the State, untrammelled by
definite functions, must remain elastic and mobile, in
spirit and organisation, that it may the more readily
respond to and interpret the citizen will. But function
becomes servitude unless it also has rights, and we must
accordingly inquire into the democratic rights inherent
in the functions exercised by the Civil Service. Assuming

io8 NATIONAL GUILDS AND THE STATE

democratic principles and Guild methods, it is evident
that the functionary, whatever his capacity, must have
elbow-room commensurate with his responsibility and
the freedom that association confers.

IV. The Spiritual State

With the ponderous catalogue, written in blood, of
crimes committed " in the interests of the State," it
seems incongruous or even grotesque to consider
seriously the spiritual attributes of the State. Yet when
men of the most sensitive personal honour commit
themselves, as statesmen, to acts they would spurn in
their private capacity, and are even proud of such acts,
it sets us thinking whether the State does not necessarily
move on a moral plane peculiar to itself and many
removes from the individual casuistic. Bismarck, so
far as I know, was privately an estimable citizen, but,
knowing the tragic results, he falsified the Ems telegram
and subsequently boasted of it. Cavour, his great
protagonist, said that, had he done in his own interests
what he had done for the State, he would properly have
been sent to the galleys. Not to press into service
the much misunderstood Machiavelli, it is abundantly
evident that national leaders, in every decade of every
century, have conceived it to be in accordance with
duty and honour to pursue great ends by methods which,
if judged by private rules, would be deemed damnable
or dubious. It is not for the Democrat to countenance
the moral or non-moral methods of statesmen whose
policy is necessarily based on suppression or exploitation.
But the condemnation of such methods must be found
in the destruction of the conditions that induced them
and not in any immature conception of a State policy
guided by rules designed for individual conduct. That
is to say, the new conditions of life adumbrated in a
democracy, economically and politically enfranchised,
must be reflected in a corresponding change of spirit in

NATION, STATE, AND GOVERNMENT 109

the State, and compelling statesmen to obey new spiritual
truths. But it does not follow that the individual code
of honour need therefore be imposed upon the Nation
and the State. The point to be noted is that the State
must not merely respond to the will of the Nation, but
interpret, express and accept the spiritual impulse
behind the national will. It must do more : as the
executive organ of citizenship, it must guide the citizen
to right conclusions. In its executive capacity, it
necessarily acquires a fund of knowledge and experience
which it holds in trust for the community. Thus,
spiritual action and reaction between Nation and State
is in the nature of things, and this guidance is therefore
natural, inevitable, and democratic.

This interaction between State and Nation is the true
sphere of politics ; and, properly understood, the purging
and exclusion of its modern debasement, known as
" real politics." Whatever unhappy vicissitudes politics
has passed through since the glory of Greece set it
on its way, it is as true now as ever that successful
statesmanship is founded on enduring principles and
not upon the appraisement or nice balancing of material
considerations. There is a practical sagacity, notably in
the obiter dicta of Bacon and later in Cromwell's policy,
that does not disregard the economic factors ; but that
sagacity turns to cunning or opportunism if it lose faith
in the fundamental principles disclosed by time and
circumstance. This is not to deny the main fact of
modern industrialism that economic power precedes and
dominates political action. There is a sense in which
that aphorism is permanently true ; another sense in
which it is a polemic peculiar to existing conditions.
It is permanently true in that statesmanship must possess
the material means to encompass its ends, precisely as
one must have the fare and sustenance before proceeding
on a journey. But whilst the fare must be available as
a condition precedent to the journey, it remains a means
to the end. Our aphorism is a polemic peculiar to

no NATIONAL GUILDS AND THE STATE

private capitalism in that the fare — to continue the
metaphor — is controlled by an interested section of the
community, which can consequently decide the time and
direction of the journey. But when the fare and susten-
ance pass from private to communal control, in the
process increasing in abundance and availability, we find
ourselves as a people free to embark on whatever spiritual
or political enterprise we desire. Economic power is not
finally found in wealth but in the control of its abundance
or scarcity. If I possessed the control of the water
supply, my economic power would be stupendous ; but
with equal access to water by the whole body of citizens,
that economic power is dispersed and the community
may erect swimming-baths or fountains or artificial lakes
without my permission. Not only so ; but the abundance
of water, which economically considered is of boundless
value, grows less serious as a practical issue the more
abundant it becomes.

Upon the substantial truth of this hangs our concep-
tion of citizenship and State policy. I have consistently
disclaimed for the future Guilds the control of wealth,
conceding to them no more and no less than the control,
through monopoly, of their labour-power. The product
of their labour is not Guild property but a national trust.
The disposal or distribution of that product must, in
the ultimate, be guided by public policy, which knows
neither producer nor consumer as such (favourably or
adversely affecting now one, now the other), and has
regard only to the public good. On any great issue
affecting the general welfare, the citizen body will
naturally discuss ways and means with the representatives
of the Guilds — possibly a joint session of Parliament and
the Guild Congress — but the final decision can only rest
with the State, as the formal representative of the nation.
To admit the principle of co-sovereignty is to admit
co-equality between means and end, between the instru-
ment and the purpose. But I am not now discussing
the particular point of co-sovereignty ; the principle in

NATION, STATE, AND GOVERNMENT iii

question is that, however economic power may be
dispersed after wage-abolition, the subsequent growth
of wealth depreciates it as a social consideration, and,
in consequence, appreciates principle (which is an affair
of the spirit) as a dominant factor in the sphere of
politics. Thus, the destruction of private capitalism
terminates all polemics based upon it, and sets in true
relation the means to the end, wealth to life. The end
in view is a triumphant citizenship, which knows how
sanely to apply its wealth, " that it may have life and
have it abundantly."

The dominance of economic power depends, therefore,
upon two main considerations — artificially, by the private
control of wealth ; fundamentally, by a natural scarcity.
If the former be abolished and the latter overcome, the
State possesses the means to achieve its purposes, so
far as they depend upon economic resources. In this
connection, it is not without significance that common
parlance often describes a propertied man as " a man
of means," and never so far as I know as " a man of
ends." But it is usual to refer to a statesman as one
having ends to be served by political methods. These
philological distinctions are at bottom instinctive citizen-
ship — a recognition that wealth is a means to an end.
The future of Society, of the Nation, and finally of
Civilisation, therefore, rests upon the will of citizenship.
But this will or volition is limited by knowledge, rooted
in the surrounding world, " irradiated with the colours
of things that man has perceived as a theoretical spirit,
before he took action as a practical spirit." Reality
projects itself into the theoretical spirit, which reacts
with new perceptions, out of which emerge beginnings
and new facts. Viewed in this light, the spiritual process,
comprehending the forms of practical activity, and
creating the will to change in whatever degree surround-
ing conditions, is of incalculably greater moment than
the means by which those changes are effected. The
spiritual life of a people, thus vaguely suggested and

112 NATIONAL GUILDS AND THE STATE

more vaguely defined by, I fear, an illicit use of philo-
sophic terms, cannot fail to be profoundly influenced by
the State ; ought, in fact, to be so influenced, when
State activities are no longer entangled in that debasing
realpolitik, by which the industrial system not merely
survives but dominates. If this be so, if the State, as
here defined, is cast for the beau role, then a Democracy
that knows its business, whilst ensuring economic health
and strength, will most anxiously concern itself with the
meaning and growth of ideas : will, with vigilance,
guard against false and disruptive ideas : will diligently
explore new ideas for the enrichment of life. So long as
public policy is moulded by material factors, we are only
a little higher than the animals ; when our policy is
guided by pure ideas, we are only a little lower than the
angels.

In the ever-recurring choice and oscillation between
these two extremes, the tone and temper of the State is in
importance second only to the national spirit. Consisting
oi personnel (and therefore distinct from the Government
which is functional throughout), it is of supreme moment
that our statesmen should be inspired by principles
consistent with pure democracy. " It is a terrible
thing," says Professor Santayana, in his mordant and
witty study of German philosophy,^ " to have a false
religion, all the more terrible the deeper its sources are
in -the human soul." He proceeds from this standpoint
to examine the growth of national egotism in Germany,
so far as it can be traced to German philosophy. It is
no part of my case to prove him wrong or right — I am
too ignorant, in any event, to undertake such a task —
but let us suppose that he is substantially right, though
even if he is wrong, it would not afi^ect the argument.
His thesis may be briefly stated. German philosophy
(not, let us note incidentally, philosophy in Germany), he
tells us, cannot accept any dogmas, "for its fundamental
conviction is that there are no existing things except

^ Egotism in German Philosophy, by G. Santayana. (London : Dent.).

NATION, STATE, AND GOVERNMENT 113

imagined ones : God as much as matter is exhausted
by the thought of him, and entirely resident in this
thought." The denial that a material world exists except
as an idea necessarily bred in the mind removes this
philosophy from a sane recognition of nature and the
practical activities, from " real reality " as Croce puts
it. Thus, experience is put behind " a background of
concepts and not of matter ; a ghostly framework of
laws, categories, moral or logical principles to be the
stiffening and skeleton of sensible experience and to lend
it some substance and meaning." In such a mental
world, where the perceptions are reality and their
external objects cease to be, its ruling king must be
ambiguity. This ambiguity grows the more ambiguous
by the " tendency to retain, for whatever changed views
it may put forward, the names of former beliefs. God,
freedom, and immortality, for instance, may eventually
be transformed into their opposites, since the oracle of
faith is internal ; but their names may be kept, together
with a feeling that what will now bear those names is
much more satisfying than what they originally stood
for." Thus, Professor Santayana represents German
philosophy as a camera obscura, with a universe painted
on its impenetrable walls.

It needs but a turn of the wrist to add almost any
content to this " ghostly framework." Suppose then
that some philosopher — shall we say Hegel .'' — finds
historic justification for the belief that German culture
was foreordained to swallow up all other cultures, and
the German legions, pari passu, to sweep clean the world
of the outside barbarians. Nothing easier. The " cate-
gorical imperative " provides the nexus connecting concept
with action. Here we have the accommodating principle :
" That conscience bids us assume certain things to be
realities which reason and experience know nothing of."

Now let us suppose that this philosophy in its main
outlines gradually percolates through professorial walls
to the non-philosophic world outside, the political and

114 NATIONAL GUILDS AND THE STATE

teaching professions become infected with the morbus
philosophico-empiricus, pure philosophy is vulgarised and
political activities caricatured past recognition. Out of
this welter comes that " false religion," to which Professor
Santayana was referring. Meantime, the official world,
realising the potency of the ideas, spreads them, insists
upon them. The schools .'' They must be captured.
The State must certainly rely upon its subjects, " for
whoever has a well-grounded will, wills what he wills
for all eternity." Every national activity, academic,
theological, military, economic, is subjected to the great
end — the supreme and final victory of the Germanic idea,
with its corollary the Germanic hegemony.

In this we can see the spiritual State, in this in-
stance an autocratic State, uncorrected and even unmodi-
fied by an impotent mass of servile workers, as yet
ignorant of real democracy. This autocracy is now
doomed, if not by fact of arms, by the relentless force
of truth. " The aristocratic illusion," if I may again call
in aid the keen intelligence of Croce, " is closely allied
to that one which makes us believe that we, shut up in
the egotism of our empirical individuality, are alone
aware of the truth, that we alone feel the beautiful, that
we alone know how to love, and so on. But reality is
democratic." ^ We are frequently told that autocratic
States are, in the nature of the case, stronger and more
united in action than democratic States. Perhaps
there is some substance in this criticism ; but we must
remember that Democracy is not moved by the egotism
inherent in autocracy: takes wider views: does not restrict
its principles to its own national frontiers : has hitherto
been weakened in the assertion of its principles by its
contentions with its own autocrats and plutocrats. The
cure does not lie in the direction of rendering the
democratic State weaker, but rather strengthening it by
an invigorating stream of new ideas, based on " reality
that is democratic."

1 Philosophy of the Practical, by Benedetto Croce. (London : Macmillan.)

NATION, STATE, AND GOVERNMENT 115

The conclusion is that, whilst at first blush the
conception of the State as essentially spiritual in its
nature seems a counsel of perfection, it is found on
closer examination to be as practical as it is urgent.
Our problem is, therefore, to win through to Democracy,
and to provide it with a State organisation at once
responsive to its will and capable of directing a functioned
Government to definite democratic ends.

V. External Relations

We shall perhaps appreciate more readily the nature
and structure of the State if we consider it in its external
relations. Always a State's first duty is to its own
people. This is true in no selfish sense ; as the nation's
welfare is founded on domestic policy, clearly domestic
policy is of primary importance. In our foreign policy,
however, comes an insistent call for sympathetic under-
standing and adaptability to world-currents of thought
and passion. It is comparatively easy to understand
ourselves ; to understand, and deal sympathetically with
others, whether they be autocracies or democracies, is
no easy task, involving those spiritual qualities essential
to the work of the State. Thus, in the peril suggested in
the previous section, we must first understand it and
then meet it with spiritual weapons. The final resort
to force, even though inevitable, is not victory but
destruction. To be compelled to destroy is a confession
of failure. The weeds should never have been allowed
to grow. In destroying them we also destroy the crop.
The only justification for war is that the poisonous
growth must be extirpated even at the loss of many
crops.

It is a commonplace that hitherto diplomacy has
been the last preserve of the aristocratic and capitalist
classes. In Great Britain, the diplomatic service has
been open only to men of private means. In my own
experience, I know of three men, all capable linguists

ii6 NATIONAL GUILDS AND THE STATE

and accomplished in international affairs, who have been
excluded because they possessed nothing but brains.
The financial bar has not only kept brains at a distance ;
it has kept the moneyed diplomatists at a distance from
reality. We have only to read the memoirs of diplo-
matists and their wives to understand how remote
they are from actualities, how narrow is their horizon,
how insidiously they become affected with the belief
that they are at the pulsating centre of world politics.
Prince Lichnowsky is a case in point. In his memoran-
dum, he tells us that " notably in commercial circles I
encountered the most friendly spirit and the endeavour
to further our common economic interests." He
graciously accepted invitations from the Chambers of
Commerce of London, Bradford, Newcastle, and Liver-
pool. He lays stress on the " importance of public
dinners." To clinch his diplomatic success, the crown-
ing triumph, he " met with the most friendly reception
and hearty co-operation at Court, in Society, and from
the Government." This honest fellow, whose simplicity
is one of the few engaging features of the war, notes
that " an Englishman either is a member of society or
he would like to be one. It is his constant endeavour
to be a 'gentleman,' and even people of undistinguished
origin, like Mr. Asquith, delight to mingle in society
and the company of beautiful and fashionable women."
His observation tells him that " the British gentlemen
of both parties have the same education, go to the same
colleges and universities, have the same recreations —
golf, cricket, lawn-tennis, or polo. All have played
cricket and football in their youth ; they have the
same habits of life and spend the week-ends in the
country." In all this, there is no foreign bias ; a
British diplomatist would have written in very much
the same strain were he trying to explain the situation
to a foreigner in Rome or Bucharest. It did not occur
to Prince Lichnowsky, nor would it have occurred
to any European diplomat, that the society he was

NATION, STATE, AND GOVERNMENT 117

describing was but a mole on the face of the nation.
There is not a trace of priggishness in the memoran-
dum ; the portrait the writer artlessly paints of himself
is on the whole attractive ; yet the impression is vivid
that had he addressed the Trade Union Congress he
would not only have felt it derogatory to his position
but would have uttered foolish or inappropriate senti-
ments. His manner would doubtless have been charm-
ing, but " a hospitable house with pleasant hosts is worth
more than the most profound scientific knowledge ; a
savant with provincial manners and small means would
gain no influence, in spite of all his learning." Our
fool-errant explains the origins of the war more com-
pletely than he imagines : ingenuously discloses the
exotic atmosphere, common to all diplomatic groups,
in which were nourished the germs of the great tragedy.
The diplomacy of a democratic State would, of
course, make short work of the artificial international
relations so dear to the heart of the existing diplomatic
service. It would know nothing of Court or Society,
or the trivialities incidental to that life ; it would be
preoccupied with the infinitely greater task of bringing
closer together peoples and not princes, the workers of
all nations and not the idlers. ^ It is assumed that the
present diplomatic methods, with all their courtliness
and po/itesse, must be maintained because of their dignity,
as though dignity were an affair of manners, forgetting
that it is responsibility that confers dignity and creates
its own code of manners. It is further assumed that
a university degree and a knowledge of French (other
languages optional) constitutes the minimum equipment
of a diplomat. No doubt these are useful accomplish-
ments, but they are not aristocratic monopolies. The
new democracy will see to it that " the savant with

^ We realise the truth of thia in the foreign propaganda of the Bolsheviks
Standing for a new scheme of life, they are compelled to spread their tenets in other
countries. The feverish attempts made by Capitalist Governments to exclude Bolshevik
missionaries and principles are a strange commentary upon the confidence which
Capitalism feels in the justice and strength of its own system.

ii8 NATIONAL GUILDS AND THE STATE

provincial manners and small means " shall function
to advantage, leaving to " the hospitable house with
pleasant hosts " such small talk as may prove agreeable
to " the company of beautiful and fashionable women."

In the full assurance that the diplomatic manners
of the democratic State may safely be left to arrange
themselves, and will in fact compare favourably with
those of the ancien regime, let us turn to the real business
of the democratic State in its external relations.

I have elsewhere ^ dealt with the international
economic reactions from the abolition of the wage-
system. I must return to the subject in later chapters,
but may here briefly summarise the argument. To
the criticism that National Guilds would prove unequal
to the strain of international competition, the reply is
made that the wage-system is wasteful because it carries
on its back not only an army of non-producers (who
incidentally are the largest individual consumers) but
also a number of parasitic industries that minister to
the luxuries and vices of the non-producing consumers.
The elimination of these uneconomic elements increases
our economic power as a nation and a community.
Therefore, in our barter with other peoples, and assuming
that Guilds are only established in Great Britain, we
are at a distinct advantage. But this is not so much
an economic as a commercial advantage, and funda-
mentally contrary to Guild principles ; the basic principle
is that a bad economic system in one country bears down
th3 standard of life of the whole world. Thus, whatever
the relative advantage a Guild nation may possess over
a capitalistic nation, both suffer in their respective
degrees from the waste inherent in capitalism. It
would therefore be the duty of the Guild nation, by
precept, example, and substantial help, to aid the demo-
cratic elements in other countries to rid themselves of
the profiteering incubus. But, in so far as other nations
are dominated by capitalism, expressing itself in open

1 National Guilds, " International Economy and the Wage System," p. 27 et seq.

NATION, STATE, AND GOVERNMENT 119

or disguised autocratic forms, Guild diplomacy would
necessarily find itself in an unfriendly atmosphere :
might fail in its purpose : might become the object
of attack : might ultimately be compelled to break off
diplomatic relations and defend the new economy by
force of arms. It is certain that the Guilds would
seek to exchange their products with Guilds in other
countries and on Guild principles. Until this stage
be reached, there can be no international democracy,
which awaits the Guild principle for its full fruition.

The diplomatic work, therefore, of a Guild State
would be mainly missionary in character, aiming at a
co-ordination of moral and economic effort. If our
diplomatic propaganda is confined to exclusively economic
considerations, the higher purposes implicit in Guild
organisation are obscured and thwarted. We organise
ourselves on a Guild basis that we may become better
citizens. In our relations with other peoples, this end
can only be served by our diplomats first understanding
the genius of the people to whom they are accredited,
and then guiding their policy in harmony with that
genius. It is essentially an affair of ideas, of doctrines,
of spiritual perceptions.

But the work of the citizens' representatives abroad
must be correlated with the immediate material require-
ments of the Guilds at home. They want raw materials
and finished goods of many descriptions in exchange
for their own products. This international exchange
is definitely functional in character, and must be related
to the governmental organisation. The broad distinc-
tion here drawn between State and Government is
reflected in the existing diplomatic machinery. The
ambassador is concerned with problems and ideas ;
he must understand the people to whom we have sent
him, and act with the sympathy that comes of under-
standing. His work is in fact spiritual. The govern-
mental machinery that deals functionally with commerce,
with exchange, and generally with duties defined by law

I20 NATIONAL GUILDS AND THE STATE

is the Consular Service. Since, by hypothesis, we have
relegated the economic function to the Guilds, it follows
that the consular organisation must be controlled by the
Guilds and become the medium through which the
Guilds may buy and sell in foreign countries. Then,
as now, we shall discover that, so long as the Guild
Consuls act within their prescribed functions, they
will not only be unhampered in their work, but helped
in every possible way by the Diplomatic Service — the
service of ideas. But when, as must constantly happen,
new developments call for changes in public policy,
the problem must be resolved by the citizens' repre-
sentatives, because, abroad as at home, public policy
must be the expression of citizenship and never subordin-
ated to sectional or economic interests.

The spiritual aspect grows even more pronounced
in the State's relations with subject races. In dealing
with organised nations we are presumably dealing
with equals, and responsibility is therefore more or
less equally divided. But with subject races the
responsibility is wholly ours, and therefore the greater
is the spiritual burden thrown upon us. When we
remember that practically all tropical products come
by the labour of negroes, coolies, Hindus, half-breeds
of endless variety, not to mention the Chinese, it is
evident that we must act in accordance with principles
that recognise in these peoples of backward or arrested
development a human brotherhood. To Cain's question,
the State must answer that assuredly it is its brother's
keeper ; that the brother, whatever his problems,
shall no longer be subjected to economic oppression ;
that he shall be dealt with fairly, the fruits of his
labour going back to him In such wise that he may
grow in racial stature. Just as yesterday and to-day
the Colonial Office has protected the tropical labourer
against the avarice and brutality of planters — protected
him at least in some degree — so I can imagine a demo-
cratic State also protecting him against thoughtless or

NATION, STATE, AND GOVERNMENT 121

oppressive exploitation by the Guilds. I have heard it
argued that the economic emancipation of the white
man depends largely upon the successful exploitation
of the black and yellow races, who are destined to do
the onerous and dirty work of the world. A peculiarly
foolish and mischievous notion. The dirty work is
now done by white men. Our problem is to make dirty
work clean and desirable, and not to distribute it amongst
the weaker brethren.

From this short survey, I hope it is possible to draw
the conclusion that the State in its foreign relations
has spiritual jesponsibilities of a high order ; that in
its material dealings it can safely act through the Guilds,
whose work must become increasingly international
as the peoples of the earth draw closer together in senti-
ment and interest. But, above all, a wise State will
be guided by the fundamental principle that a nation
badly or uneconomically governed is a danger to us all.

VI. The Role of the State

If, in emphasising the sovereignty of the citizen in
the body politic, I have seemed to depreciate the func-
tional value of wealth production, I am nevertheless
always conscious that, as things are to-day, and must
continue for another generation, man's livelihood is
his main preoccupation. Even when we have set our
economy upon a new foundation of equity, there remains
the perennial struggle with nature. My difficulty
has been, not to minimise the economic problem, but
to set it in due relation to the spiritual life of mankind
— to religion, art, literature, science, what, in short,
we live for. Senor de Maeztu comes near to the truth
of it in the hierarchy of values he outlines in his book.^
Highest in the scale come moral satisfaction, scientific
discovery, and artistic creation. Next comes man with
his associations and institutions. After these and on

1 Liberty, Authority, and Function, p. 274. (London : George Allen and Unwin.)

122 NATIONAL GUILDS AND THE STATE

a lower grade come the economic values. " The reason
why it is impossible for me to accept any other scale
of values, or to change the order of this scale," he says,
" is not difficult to explain. It is thought out in such
a way that the first category of values includes the second
and third ; the second includes the third but not the
first ; and the third does not include either the first or
second." If we apply this scale of values to the capitalist
system we can arrive at the true measure of its con-
demnation, because it makes men lose themselves in
the third degree when they ought to be consciously
struggling towards the first. It is no business of National
Guildsmen, rightly indignant with the existing wasteful
production and inequitable distribution of wealth, to
accept the false scale of values imposed by capitalism.
And herein we discover the ethical condemnation of the
suggested co-sovereignty of the first and third grades of
this scale. Although my approach to the problem
differs from Senor de Maeztu's, it may be observed that
his first grade of values generally corresponds with
the spiritual aspect of citizenship upon which I have
insisted.

The logic of my statement as to the role of the State
demands that in structure it shall be elastic, mobile,
and responsive to the sovereign power — so elastic
and mobile as to elude functional definition. State
organisation is primarily directed to the main purpose
of expressing the will of the community, nationally
through Parliament, locally through the local elected
authorities. The local problem need not detain us
here, but I may remark, in passing, that one of my
reasons in urging the development of municipal into
provincial government is that citizens may secure
greater freedom in local life. The smaller the body,
the less representative it becomes and the more inevit-
able that it should be kept in leading-strings by the
central authority. But it has not as yet dawned upon
many thinkers that, if the federal principle can work

NATION, STATE, AND GOVERNMENT 123

so well in Canada with one-quarter or one-fifth our
population, it may with advantage be applied in Great
Britain. In any event, I do not shrink from the fullest
application of the principle of sovereign citizenship, in
its right degree, to local as to national life. The spine,
then, of State structure is a Parliament charged to give
effect to the express will of the general body of citizens,
voting as citizens. I need not here discuss the vexed
question whether the members of the Parliament are
properly interpreters of the communal will or delegates.
Personally, I think they ought to regard themselves
as interpreters. In the process of interpreting their
constituents' minds, they play, or ought to play, a
considerable part as educators, the special knowledge
they acquire at the centre being of course at the disposal
of the electors. The difficulty involved in delegation
is obvious : delegation demands definition, whilst the
business in hand defies definition. But the issue is
always with the electorate. If it decide on delegation,
delegation it must be.

Here we stumble upon a curious coincidence. Many
learned pundits, dreading the complete sway of " trium-
phant democracy," are perpetually considering how to
evade or counteract the electoral decision. They aver
that there must be constitutional checks and counter-
checks, so that nothing shall be done rashly and without
due consideration — due consideration generally meaning
consideration for the possessing classes. So they propose
a second chamber, to be composed of men of weight and
property, to curb the speed of the democratic coach.
Others favour a referendum ; others want proportional
representation, so that the minority may kick with
greater vigour. On the other hand, we have so con-
vinced a democrat as Mr. Cole, who, visualising the
State as the consumers* representative, advocates
co-sovereignty or a nice balance between consumers
and producers. The answer to the first group is that
when the electorate definitely declares for a certain

124 NATIONAL GUILDS AND THE STATE

policy or proposal, every effort made to impede it is
anti-democratic and essentially disloyal. The effects of
this particular type of disloyal obstruction are now being
felt in England and Ireland. Defective though our
present democratic machinery may be, it was at least
equal to a declaration in favour of Irish Home Rule.
The electors in fact knew instinctively better than
the obstructionists. The price we must pay is very
heavy. To Mr. Cole I reply that, apart from our
different conceptions of the State, a nice balance means
cessation of movement. No retrogression, to be sure ;
but also no progress.

As Mr. Cole's analysis of the nature of the State
differs fundamentally from mine, I cannot dismiss
it with an epigram. At the outset, we disagree on
definition, or rather on our conception of the State.
He sees the State as the supreme territorial association,
and therefore the natural representative of the consumers
or " users " or " enjoyers," who also happen to be
territorial by reason of residence. He transforms a
coincidence into a principle. No doubt the consumer
must live somewhere, so also must the producer — must
live in the same house and in the same skin as the
consumer. But, qua producer, he has a vocational
origin, which differentiates him both from the consumer
and the State. Since the consumer annexes the State
as his special guardian and representative, the producer
must look in the first instance to his Guild, and ultimately
to the Guild Congress, for satisfaction and protection.
Since the State, as a territorial association, represents the
general body of consumers or users or enjoyers, and
since the Guild Congress represents the general body
of producers, Mr. Cole sees two powers, one territorial,
one vocational, of equal weight, the one legislating for
the consumers, the other for the producers, settling their
differences in joint session, with a judiciary common to
both, dispensing State law or Guild law as occasion
arises. Out of this springs the theory of balance or

NATION, STATE, AND GOVERNMENT 125

co-sovereignty. If we grant Mr. Cole's premiss that
the State is, in effect, a body of consumers, we can go
a step further with him and agree that the division of
State and Guild powers can be found in function. But
Mr. Cole dismisses the vital distinction between legisla-
tion and administration as no longer tenable. " We
must recognise that the control of legislation and
administration cannot be divorced, and if we are to
find a cleavage at all, we must make a new cut." This
" new cut " is by function. But to resort to function
in this general sense is to beg the question. We cannot,
in the first place, accept without further examination Mr.
Cole's assumption that legislation and administration are
functionally inseparable. I have already argued for this
separation on three grounds : (a) the nature of the
State ; (J?) function applied to administration and
not applicable to the State — this fact in itself involving
differentiation ; and (c) the adoption of Guild principles
by all administrative bodies — a right they share equally
with the producers. As the next section of this chapter
deals with administration, Mr. Cole and I can most
conveniently discuss there our differences in that regard.
In our previous discussion on the relation of pro-
duction to consumption, it will be remembered that
Mr. Cole gave the word " consumer " a much wider
connotation than I was prepared to admit. Now, let
us look at the result. He argues for two legislative
machines of co-equal authority. Parliament legislates
for the consumer as such ; the Guild Congress for the
producer as such. But having regard to the broad
definition that Mr. Cole gives the consumer, there is not
a section or even a sub-section of Guild legislation to
which the consumer cannot take objection, if so minded.
As a fact, I do not think that we need anticipate can-
tankerous criticism ; but we may reasonably anticipate
a constant struggle for power, in small things as in great.
Where objection is taken by the Parliament of consumers
to legislative measures passed by the Guild Congress,

126 NATIONAL GUILDS AND THE STATE

Mr. Cole's solution is a joint session of the co-sovereign
bodies. This opens up a vista of an almost perpetual
joint session, with consequent delays and irritations, and
incidentally destroys co-sovereignty, the joint session
becoming, ipso facto, the ultimate sovereign authority.
But I, for one, have advocated National Guilds for two
reasons, which Mr. Cole's proposals would effectually
nullify : I would relegate the economic function to the
Guilds that Parliamentary work may be unhampered
and unvitiated by economic interests ; secondly, I want
National Guilds to be absolutely masters in their own
house and within their defined function — a function
upon which they would naturally agree with the State,
from which they obtain their charter. In plain terms,
the producers shall be masters of production — a principle
essential to good craftsmanship. Thus, the effect of
Mr. Cole's theory of balance or co-sovereignty is to
subject the producer to a supervision almost as galling
as under capitalism — an intervention with the minimum
result and the maximum friction. I again affirm that
the consumer, in my sense or Mr. Cole's, is only
concerned with the finished product. If he poke his
nose into the productive processes, which are no
business of his, he must expect the fate that pursues the
interloper.

In regard to Guild legislation, Mr. Cole and I are
in substantial agreement. I have already argued that
sick, old age, and unemployed maintenance is a Guild
function. The administration of the necessary funds
involves regulations which in effect constitute legislation.
Indeed, the Guilds would every day automatically
legislate. The power would be implicit in the Guild
charter. Nor is it a novel principle in law. It would
be little more than an expansion of the already juridically
recognised " custom of the trade." Even to-day,
municipal authorities, chartered corporations, andjpublic
trusts have powers of regulation which, in their own
sphere, practically amount to legislation. But the

NATION, STATE, AND GOVERNMENT 127

rights of citizenship remain sacred. Citizenship is a
discipline and a destiny that knows neither producer nor
consumer : regards production and consumption, not as
ends in themselves, but means to an end.

VII. The State in Diagram

The argument may perhaps be illustrated in a
diagram.

SOVEREIGN CITIZENSHIP
The State.

Administration Judiciary. Army and Navy. Wealth Production

Government. and Distribution.

I The Industrial Guilds.

National. Municipal. Colonial Foreign Unemployed, Technical Distributive

I 1 Affairs. Affairs. Siclmess, Education. Guild.

' j Old Age.

Public Health. Education.

VIII. The Bureaucrat

In developing new doctrine, one of the minor
difficulties is the discovery of an acceptable vocabulary.
Thus, I have throughout distinguished between the
State and the Government. The distinction is not mine ;
it is implied in our constitutional law. But in recent
years, and particularly during the war, so much power
has been vested in various administrative departments,
notably the War Office, that we have been apt to forget
that we owe allegiance to the State and not to the Govern-
ment. The State, properly understood, is the organisation
that gives effect to sovereignty, whether such sovereignty
derive from a king or a democracy. Granted the
State, sovereignty follows. Doubdess a democratic State
will differ in structure from the autocratic, but more in
spirit and vision than in structure. The structure must.

128 NATIONAL GUILDS AND THE STATE

however, be modified that it may at all times respond to
the new spirit and vision. Otherwise, the State, if not
actually undemocratic, hampers, and on occasion defeats,
the citizen will. The Government, properly understood,
is the administrative organ of the State, the State's agent
and man of affairs, true to its function only so far as it
faithfully obeys the State's behests.

Two new factors, as the outcome of Guild criticism,
enter the problem : (a) the conscious application of
the functional principle, with due consideration for the
atmosphere and responsibility requisite to the effective
fulfilment of function ; and {b) the rights and liberties
to be secured to administration through Guild principles
and organisation. Clearly, function brings with it
responsibility ; it is equally clear that the right of
organisation, vital to a Guild society, brings with it
liberty. It is in the direction of functional responsibility
and Guild liberty that we must look for the abolition
of a servile administration, which has hitherto sought
its protection in cunningly contrived bureaucratic vested
interests, and not in the frank acceptance of professional
union based upon services rendered. Water cannot rise
higher than its level : the administrator cannot rise
above the citizen ; the Bureaucracy is precisely as high
as and no higher than the Trade Union.

Now, a complaisant or servile bureaucracy is a venal
bureaucracy ; a degradation in itself and a cancerous
growth near the heart of the public liberties. It becomes
the pimp of power, obsequious to wealth and social
position, truculent and overbearing to the dispossessed.
The history of bureaucracy in Ireland since the Act of
Union is the history of a servile tool in the hands of the
Ascendancy, and only comparable with the bureaucratic
control of Austria in the Trentino, Hungary in its
Magyar domination, and the German bureaucracy in
Poland. Historically considered. Great Britain has
probably suffered less from this particular form of
oppression than any other European country. During

NATION, STATE, AND GOVERNMENT 129

the last generation, say for thirty or forty years, we
have regarded the growth of bureaucracy in two diverse
lights : by some, as the advent of Socialism ; by others,
as an insidious invasion of personal liberty. Neither
view is finally tenable. The growing complexity of life
has necessitated reflex administrative action, whilst the
intervention of bureaucracy in industry, far from proving
the strength of Socialism, has been but the measure of
its impotence. It is an admission that industry cannot
be nationalised in the collectivist sense ; that the most
that can be done is to protect the public health. Even
during the war the so-called " controlled establish-
ments " were managed by capitalists, on capitalist lines,
and for profit. The railways, assumed to be nationalised,
are guaranteed their old dividends, not by their earnings,
but by the State. Nevertheless, the problem of Govern-
ment, of administration, of bureaucracy, if luckily with-
out many of the sinister features prevalent in other
countries, has now become acute in Great Britain.

Just as the revolutionist sees in the State the oppressor
and the enemy and seeks to destroy it, so he sees in the
bureaucracy the instrument of the oppressor and would
destroy it also. But, just as the cure for State oppression
is democratic citizenship, with the consequent changes
in spirit and structure, so the cure for bureaucracy is to
inspire it with the new spirit and ensure its future good
behaviour and efficiency by binding it in function and
conferring upon it the liberty of Guild organisation.
Oppression does not come from free and self-respecting
men — a truism as applicable to bureaucrats as to tinkers.
Let us, then, consider how the sovereign citizenship,
speaking through its agent the State, would approach
the new bureaucracy. It lends itself to dialogue :

The State : " I propose to assign to you this
responsible task."

The Bureaucrat : " It is certainly an important
function. But, before undertaking it, please tell me
the terms and conditions attaching to it."

I30 NATIONAL GUILDS AND THE STATE

The State : " In the last resort, I can compel you
to do it upon whatever terms I choose. But in normal
times, it is essential that you should be not only con-
tented in your work but proud of it. Tell me upon
what conditions you would gladly and freely undertake
the work."

The Bureaucrat : " In regard to the actual function,
you agree that it is highly important and responsible.
My responsibility should be recognised by giving me
complete liberty of action, so long as I keep to my
particular function. I mean by that two things — (a)
that the function, being the thing round which my
colleagues and I associate and to which we devote
ourselves, must always be the primary consideration and
never subject to vital modification, without your express
sanction ; and (F) my associates and I, faithful to the
function assigned, will make ourselves responsible for
our own discipline and methods."

The State : " Since the function comes from me,
as well as your commission, the function and you are
both under my direct protection. No person, however
politically strong, can abrogate the powers hereby
conferred on you. That, I think, is the liberty of action
you require. In regard to discipline, I should like to
hear you further on that point."

The Bureaucrat : " I am glad to think that if we
faithfully obey our commission we can rely upon it
that we can never become the cat's-paw of political
schemes. Subject to faithful service in our allotted
function, we are citizens, free to take whatever public
action we desire."

The State : " Certainly. I do but represent citizen-
ship myself In democracy there are no classes apart."

The Bureaucrat : " Now that I think of it, discipline
really relates to the terms of employment. As to that, I
ask for the security of the guildsmen."

The State : " The security enjoyed by the Industrial
Guilds is found in the monopoly of their labour. If you

NATION, STATE, AND GOVERNMENT 131

want the same security, you can only get it in the same
way, namely, by organisation. There is no reason why
there should not be Civil as well as Industrial Guilds."

The Bureaucrat : " Hitherto we have enjoyed
special consideration having regard to the importance
of our work."

The State : "A favoured class is a dangerous
class. We are now all citizens, no more and no less.
As to the importance of your work that is not now so
obvious, since it was in reality mainly important to the
governing and possessing classes as a protection of
privilege. Your value then lay in your compliant
■personnel, but it is now agreed that function, which
knows neither privilege nor compliance, takes precedence
of the person. The fact that I assign to you a function
is sufficient proof that your work has social value ; but
it does not follow that it is more important than the
function of the miner or the engineer. I certainly cannot
give you any special consideration or favoured treatment."

The Bureaucrat : " To tell you the truth, my
colleagues and I have not been happy in our favoured
but secluded position. We were not only cut off from
the activities of the general body of citizens, but we
often felt like blacklegs. We will therefore organise
ourselves into Civil Guilds."

The State : " I would welcome it. Instead of
becoming entangled in a network of variegated
functions, with their special rights and duties, the Civil
Guilds could proceed by charter like the Industrial
Guilds. The functions would be defined in the various
charters and each Guild could become responsible for
its own pay and discipline."

The Bureaucrat : " Where would our pay come
from.?"

The State : " The Civil Guilds are the spending
Guilds, but their economic value is not less on that
account. The Industrial Guilds know that as well as I.
The cost of administration is found in the State Budget,

132 NATIONAL GUILDS AND THE STATE

and the Budget will be fed by the Industrial Guilds in
accordance with the terms of their charters."

The Bureaucrat : " How will the pay in the Civil
Guilds compare with the Industrial ? "

The State : " Very much on a parity, I surmise.
You must remember that the old Civil Service was well
paid in the first division and badly paid in the second.
It was a class distinction and not the reward of merit.
Sovereign citizenship abolishes such foolish and wasteful
distinctions."

The Bureaucrat : " I accept the new conditions and
will proceed to organise my fellow-workers. I will be
faithful and efficient."

The State : " If you are unfaithful to your function,
you are a traitor to your fellow-citizens ; if inefficient, a
traitor to your Guild. If charged with either of these
offences, you will be judged by your Guild peers, for
the Guilds have brought Magna Charta into the sphere
of function and service."

IX. Function in Government

In a preceding diagram it will be noticed that I
have put the Government and the National Guilds in
the same relation to the State and upon an equality.
This is true in two senses : in that they both derive
directly from the State ; in that they are both functional
in all their parts, the Administrative and Guilds functions
being complementary to, but independent of, each other.
The inference is that the balance of power sought by Mr.
Cole as between the State and the Guilds is really between
the Government and the Guilds. To Mr. Cole this
means nothing, because, in his view, " we must recognise
that the control of legislation and administration cannot
be divorced, and, if we are to find a cleavage at all, we
must make a new cut. . . . The new doctrine must be
that of division by function : the type, purpose, and
subject-matter of the problem, and not the stage at which

NATION, STATE, AND GOVERNMENT 133

it has arrived, must determine what authority is to deal
with it." The new doctrine has, of course, my unre-
served assent ; but when I pointed out to Mr. Cole that
production and consumption are two stages of one
economic transaction, and therefore both within the
ambit of Guild control, he replied by assigning the first
stage to one authority and the second to another authority.
There is an infinitely greater diversity in function between
legislation and administration than between production
and consumption.

If the State, the legislative authority, must be
assigned some function, then I should contend that
it fundamentally differs from both the Administrative
and the Guild function, because it is essentially creative
whilst the others are derivative. As it appears to me
that a function must be definable, and since the business
of the State is so diverse, subject to such constant change
and varying stress, as to be undefinable, some word other
than function — mission, role, attitude, will — must be
applied to its activities. Whilst nothing, not even the
public executioner, could induce me to forswear the
sovereign quality of a completely enfranchised citizenship,
seeing in it the fountain of power and the sanction of
function, I see also as between the functional Government
and the functional Guilds a co-equality and balance,
which should reconcile Mr. Cole, since function is here
the basis of Guild doctrine, and common to us both.

The marriage of State with Government, which
Mr. Cole pronounces indissoluble, carries in its train
difiiculties of some magnitude. It peculiarly associates
the Civil Guilds — the doctors, the teachers, the civil
engineers, the architects, the public analysts, and a
number of other highly technical functions — with the
State, putting them upon a different and favoured
footing as compared with the Industrial Guilds. " Not
at all," answers Mr. Cole, in effect, " they serve different
masters. The one group serves the State, the other the
Guild Congress. There are two kings in Brentford."

134 NATIONAL GUILDS AND THE STATE

When the two kings disagree, Mr. Cole proposes a joint
conference. But how if, after the conference, they still
disagree ? How if the terms of service under the two
kings should chance to be widely diifFerent, involving
different life-standards, economical and spiritual ? Would
it not be said that National Guilds set out to unify the
national life and ended in a social cleavage as deeply cut
as under capitalism .'' Coming to function, can it be
really contended that a legislator is functionally more
closely related to a doctor or a teacher than to an engineer
or a weaver .'' Nor does disunity end there. On Mr.
Cole's hypothesis of the State, gua consumer, intervening
in production, in the work of the Industrial Guilds, is it
not clear that we may have the Industrial Guilds, in
their turn, through the Guild Congress, intervening in
State affairs, on the reverse grounds ? So far as I can
visualise it, the effect of these reactions would be a
general paralysis of function and a constant danger of
deadlock between the State and the Guild Congress.

Before coming to the basis of Mr. Cole's political
philosophy, let me briefly examine the logic of his
position. For practical purposes, he divides the com-
munity into two classes : the consumers, users, and
enjoyers, represented by the State ; the producers,
represented by the Guild Congress. These two authori-
ties, as we have seen, are defined and divided by
function. Mr. Cole is careful to insist that we must
accept function in its broad sweep. The " type, purpose,
and subject-matter," and not the stages of the functional
process, must be regarded as a whole. You must not
divide an authority into two merely because it embraces
two stages of one function. To this general principle
Guildsmen will, I think, agree. In applying the principle,
Mr. Cole finds : (a) that the functions of State and
Government being progressive (first, legislative ; then,
administrative) cannot be divorced, and accordingly
State and Government are functionally inseparable ; (i)
that production and consumption, although palpably

NATION, STATE, AND GOVERNMENT 135

two complementary stages of the economic function,
must be separated, however illogical it may seem. He
avoids this obvious inconsistency by adding a social or
political meaning to the word " consumer," reading into
it not only its precise economic connotation but also
social use, enjoyment, and amenity — the material basis
of social existence. But because consumption has a
definite economic meaning, it may on occasion be
treated in that sense and become a purely Guild function.
Consumption is the disappearing pea under Mr. Cole's
logical thimble. If two or more Guilds declare that a
certain problem of consumption is for themselves to
decide, Mr. Cole can say : " Gentlemen, I have always
reserved your rights in this matter " ; if, however, he
dissent, he can say : " Gentlemen, the State is concerned
here, and the question must be referred. Look up my
book, page 86." But when I remind Mr. Cole that refer-
ence to the State in such circumstances can only be on
the plea of public policy — an appeal, in fact, to sovereign
citizenship — ^he replies that " the State would have, in the
economic sphere, certain normal and necessary functions as
the representatives of the consumer, user, and enjoyer."
Mr. Cole's logic must be examined in the light of the
facts. Is it a fact that the legislative and administrative
functions are one, being but two stages of the same
function ? Six or seven hundred gentlemen, sitting in
Parliament as the representatives of the citizen body,
pass an Act enabling the medical officers to take pre-
cautions against cholera, or enabling teachers to instruct
their scholars in a new and higher standard, or giving
powers to construct a Channel Tunnel. Does Mr. Cole
seriously contend that the function of legislation cannot
be distinguished from the functions of the doctors, the
teachers, or the engineers, who administer the legislative
Acts ? Or does he contend that these experts are not
administering the Acts ? There is this also to remember :
an Act of Parliament is a completed fact in itself, equally
binding upon legislators, administrators, and the whole

136 NATIONAL GUILDS AND THE STATE

community. Thus the function of the administrator
begins where the function of the legislator ends. They
are not two stages of one function ; they are two
functions, not only separable, but never united. The
one function must end, absolutely end, and not continue,
before the other begins. When we remember the
stupendous volume of work daily transacted by the
State and municipal administrations, practically without
reference to legislation, I do not think we need have
much difficulty in deciding that Mr. Cole's declaration
of indissoluble marriage between legislation and adminis-
tration is not valid.

Is it then a fact that production and consumption are
two separate functions ? I have already argued this
point at considerable length, and concluded that they
are definitely two stages of one economic process. But
can we divide the economic function, in its many stages,
into two vis-d-vis authorities } Mr. Cole declares that
in principle we cannot, but that we must, because he
wants a balance of power. I think that he wants a balance
of function. I hope that I have shown him how to get
it, without hurt either to his principles or his logic.

I have an uneasy sense that, in the turn the discussion
has taken, I have done less than justice to Mr. Cole's
political philosophy. It might almost be inferred from
what I have written that he is a philosophic Anarchist,
opposed to the State, or a Materialist, blind to the
spiritual forces. He is, of course, nothing of the sort.
The points of our disagreement are small compared with
the general body of doctrine which we hold in common.
It is, therefore, only fair to him briefly to sketch his real
attitude towards the State and sovereignty.

In surveying the community, he notes the growth,
decay, or continuance of many and diverse human asso-
ciations, which in his view are no part of the State.
" The sum-total of this organised corporate action in the
community is far greater than the action undertaken by
the State, the degree in which it is greater depending

NATION, STATE, AND GOVERNMENT 137

upon the extent to which co-operation prevails in the
community, and on the sphere of action marked out for
itself by the State within the community." ^ The nature
of these associations must be discovered. Do these
associative rights derive from statute law, that is, from
the State, or is their origin natural, that is, from the
community apart from the State ? It is essential to Mr.
Cole's thesis that they should be natural ; but from the
point of view I have been arguing the question is obviously
irrelevant. Whether deriving from statute law or from
communal association, the main consideration is their
effect upon citizenship. If their influence make for good
citizenship, the State leaves them alone, but reserves the
power to mark out for itself its own sphere of definite
action, which looks rather like an act of sovereignty.
Continuing the argument, Mr. Cole sees the State as
practically an association, not different in nature from
the others, doubtless much greater and stronger, but
after all only primus inter -pares. On that score alone
the State possesses no sovereignty ; but any remnants
of sovereignty thought to be attached to it disappear
when industrial sovereignty is transferred to the Guilds.
All that remains is a territorial association, " marked out
as the instrument for the execution of those purposes
which men have in common by reason of neighbourhood."
What are those purposes .'' Consumption, use, and
enjoyment. As a balance to the State and municipality,
territorial associations concerned with consumption, use,
and enjoyment, we must have National Guilds, concerned
with production. We must also put into the scale
propagandist and doctrinaire associations that supply
the need for fellowship, churches, connections, and
covenants. In the play and interplay of these variegated
activities, Mr. Cole discovers " communal sovereignty."
Although this is a very slight and inadequate outline
of his thesis, and in this regard only, it is evidently a
suggestive contribution to social theory.

• Self-Government in Industry, p. 72. (London : G. Bell & S0Q8.)

138 NATIONAL GUILDS AND THE STATE

X. Sovereign Citizenship

It will be observed that my criticism of Mr. Cole's
doctrine is in part theoretical and in part practical. On
the three main issues it will perhaps clarify the controversy
if I conclude by comparing them.

In substance, the sovereign citizenship advocated in
these chapters is probably akin to the " community
sovereignty " envisaged by Mr. Cole. But, whereas he
indicates no practical way of asserting that sovereignty,
I have indicated the State as both the historical and
practical embodiment of citizen sovereignty. Mr. Cole
leaves it as something inherent somewhere in the body
politic and with no ultimate or effective means of
expressing itself. Further, I see sovereign citizenship
in the summation of the thought and activities of these
manifold associations, with an instrument ready to its
hand to crystallise its will. Mr. Cole does not apparently
travel beyond balance of power, with divisions which,
whether arbitrary or natural, are more exhausting than
fruitful.

Mr. Cole's conception of the State is, I think,
coloured by his failure to distinguish between the
expressed will of sovereign citizenship and the vast
administrative machinery, functional throughout, that
gives effect to the sovereign will. In regard to " indus-
trial sovereignty," Mr. Cole would disperse this between
State, municipality, and the Guilds, leaving to the Guilds
only a moiety of industrial power. On the other hand,
whilst recognising the final rights of sovereign citizenship,
I would not divide, but rather concentrate, the economic
function in the Guilds. In this way, I believe we should
evolve a finer type of industrial statesmanship. Nor will
it escape notice that the main effect of concentrating
industrial power in the Guilds is to release the State
for the spiritual leadership of the nation, which I believe
to be in its true purpose.

Finally, the balance of power sought by Mr. Cole

NATION, STATE, AND GOVERNMENT 139

cannot be other than a balance of functions. Power
springs from rights, rights are finally justified in function.
But whether it be a balance of power or function, or
whether they mean the same thing, it assuredly cannot
be mechanically contrived. That balance is either in the
nature of things, or is impossible, or is attainable only by
chance. Mr. Cole looks for it between the State and the
Guild Congress. He will look in vain, because he looks
for an artificial arrangement of society. I see it in the
natural reaction between the Administration, the great
spending Department, and the Guilds, the great pro-
ducing Department. I have not to create it ; it is there
already.

XI. State and Guilds

Remains only to consider briefly the principles of
liaison between the State and the Guilds. There is the
problem of Guild representation in Parliament ; the
vastly important problem of taxation ; and the subsidiary
problem of the right relationship between the Industrial
and Civil Guilds.

In regard to Parliamentary representation, we shall,
I think, find the true analogy in the present method of
administrative representation. In the preceding diagram,
the Government or Administration is placed in precisely
the same relation to the State as the Guilds. Each
administrative office has its official head in Parliament,
acting as liaison officer between the State and the function
of administration. This officer is the channel through
which comes the authority of the citizen body to function ;
equally, he is the channel through which come the
explanations and apologies of the several departments.
Deriving their power from sovereign citizenship, they
are liable at any moment to give an account of their
stewardship. But we know that the bureaucracy thus
created occupies an anomalous position ; it exercises
power beyond its warrant, and plays a part in policy to
which it is not entitled — the heritage of existing and

I40 NATIONAL GUILDS AND THE STATE

former autocratic systems. The Guild principle, as we
have seen, limits it in policy to its defined functions, but
confers upon it the liberty of professional association
developed into Civil Guilds. The adoption of the
functional principle, coupled with Guild organisation,
obviously involves a change in attitude towards the State.
It secures to the State, as the organ of sovereign citizen-
ship, the unchallenged direction of policy ; it secures
to the Administration that economic freedom which is
fundamental to Guild principles — an economic freedom
that can only be withdrawn in the event of unfaithfulness
to assigned and defined function. These changes in the
structure of Administration bring it into harmony and
equality with the Industrial Guilds, inducing a social
and economic unity, where previously were diversity of
interests and class antagonisms. From this harmony
we may also assume a similarity of treatment by the
State, through Parliament, and conversely a similarity
of attitude towards the State, also through Parliament.
The conclusion is that just as the various administrative
departments have their spokesmen and official heads in
Parliament so must the Guilds — either separately or in
groups, or through the Guild Congress.

But the Industrial Guilds have a function peculiar to
themselves : they must carry the burden of the State
Budget. However important may be the function of
spending — the business of the Civil Guilds — it is
evident that the provision of the public funds carries
with it unique responsibilities and indicates the necessity
of common action and joint organisation between the
State and the Guild Congress. In addition, therefore,
to Guild departmental representation in Parliament, a
peculiar bond must exist between the Exchequer and
the Guild Congress. It is common knowledge that
the Chancellor of the Exchequer always consults the
bankers before presenting his Budget. In a Guild
society, the bankers disappear and the Congress supplants
them. The informal discussions with the banking and

NATION, STATE, AND GOVERNMENT 141

allied interests must give way to some formal and
constitutionally recognised joint - session between the
Exchequer and the Guild Congress or even between
Parliament and the Guild Congress.

At the first blush this joint-session would seem super-
fluous, since the principle of taxation adumbrated in
Guild doctrine is a per capita levy on the Guilds. It is
not so easy as that. One Guild may, during the year,
have suffered severely from one cause or another — a
scarcity of raw material over the sources of which it
had no control, heavy liabilities incurred involving a
depression in the rates of pay, a bad season in the
Agricultural Guild, a large transfer of labour-power for
State or economic reasons. It would be for such a
joint -session to arrange an equitable levy upon the
Guilds, after weighing and considering the transactions
of the year. Nor would I close the door against refer-
ring to this joint body other difficulties and problems
calling for treatment or solution as between the State
and the Guilds.

My objection to this joint body possessing legislative
powers, apart from the principle of sovereign citizen-
ship, is because it is composed of disparate elements.
We send men to legislative bodies because of their
aptitudes for that kind of work ; we shall put men into
responsible positions in the Guilds because they possess
quite other aptitudes. The legislative and economic
bodies must each function in their own spheres. If
and when they collaborate, it must be for such special
purposes as they have in common. To go beyond that
is to invite confusion and friction. Nevertheless, as
one cannot sum up the activities of a nation in a book,
still less in a paragraph, I do not doubt that, subject
to the reservations already indicated, Mr. Cole's pro-
posal of a joint-session would prove valuable in many
ways, both seen and unforeseen. - r ?:

The third problem of the relations between the Indus-
trial and Civil Guilds is perhaps hardly germane to this

142 NATIONAL GUILDS AND THE STATE

chapter. In general, my solution would be the inter-
change of representatives upon the governing bodies of
all the Guilds concerned, exactly as we have already
proposed that the Industrial Guilds, following the
example of interlocking directors under the joint-stock
system, should each be represented upon each other's
executive authorities.

XII. The Inspiration of the Civil Guilds

Perhaps, in the future, men will walk with increasing
confidence without the stern tutelage of the written law,
finding a correspondence between their spiritual per-
ceptions and their external liberties. It is a favourite
theme in certain quarters that law is the palladium of
liberty. It may be so ; but it may also be the instru-
ment of oppression as galling as it is subtle. This at
least is true : the hotch-potch of variegated laws —
diverse, unrelated, ill-digested and uncoded — constitutes
a Chinese maze from which we only escape by the help
of professional guides. The Guild proposal to eliminate
from State administration the whole body of industrial
law, with the new concepts of property rights that flow
from it, is essentially a simplification that must smooth
the way of the citizen, straightening out the twists and
bends of the road he would travel. Nowhere does
the law so intimately touch and irritate the average man
as in his industrial pursuits. He may, and generally
does, go through life unconscious at first hand of the
criminal law. The vast majority of Englishmen know
nothing and care less about chancery law. The com-
mon law they know more by custom and instinct than
by acquired knowledge. Thus the removal of com-
mercial and industrial law from the ordinary practice
of the State administration renders the average citizen
almost free from statute law, except so far as it
embodies and protects his constitutional rights and
liberties. Of these he is rightly tenacious, his main

NATION, STATE, AND GOVERNMENT 143

purpose in politics being to strengthen and extend them.
His contact with the State, otherwise, is through taxa-
tion. It would be wrong to infer from this that, in
consequence, the State becomes remote from his life
and thoughts. Quite the contrary ; the simplification
both of law and regulation involved in industrial auto-
nomy clears his mind of misconceptions and puts the
supreme responsibility of citizenship into bold relief.
He will be quick to distinguish between his Guild regu-
lations (which would have the sanction of law) and his
higher rights as a citizen.

It is a profound mistake to assume that the State
retains its power and influence by its statute-book. The
promulgation and application of law probably weakens
rather than strengthens its authority. It will be found,
I think, that men set far greater store upon State policy
and tendency than upon the laws adopted by Parliament.
In their hearts and consciences the citizens look to
their" State to seize the abiding truths of every national
and international situation ; they realise that spiritual
life in the body politic is our ultimate defence against
selfish interests, vaulting ambition, or arrogant pretension.

I have failed to convey my concept of the spiritual
State — the leit-motif of this chapter — if my readers
should infer that it is incapable of dealing with practical
affairs. Clear and spirited thinking spells decisive
action and not the impossibilism of the dreamer or the
sentimentalist. Statesmen must always be confronted
with practical problems. We shall finally judge them
by the permanence of their solutions ; the stability or
instability of their policy and decisions is the measure
of their spiritual insight. But Democracy does not
build upon single individuals however brilliant ; the
democratic State is a spiritual State to the extent that
its citizens realise the vital principles of social existence
and insist upon their application to all alike, without
fear or favour.

PART II

TRANSITION

SIGNS OF CHANGE

I almost invariably find people prepared, if only under logical
pressure, to accept the reasonableness of National Guilds as an
abstract economic theory, and many seem to have no misgivings
as to their workability when once the Guilds have been established ;
but so often faith in the possibility of a Guild system breaks down
at the question, " How is it to be brought about ? " I believe
that the transition stage is the weakest part of our exposition of
Guild principles. I do not expect to be able to build a cut-and-
dried system of the transitional process from wagery to National
Guilds, but I wish my ideas were clearer ; and I feel sure it would
be a real help to other Guildsmen if you were to provide us with
a lengthy article or a short series on the subject, or, failing this,
if you would give us references both to your book National Guilds
and to the articles which have appeared in The New Age in recent
years, so that those of us who are really trying to get a firm grip of
the subject might have the thing put to us in a nutshell. — H. E.,
in Letter to the Writer.

Nothing whatever is more needed than to kindle the imagination
and the faith of Labour by a vision which shall be mighty, but at
the same time true. As we shall show, any programme of Recon-
struction must be as definite as vast, and as practical as audacious.
The bolder the better. — The Observer.

It has been suggested that means must be devised to safeguard
the interests of the community against possible action of an anti-
social character on the part of the Councils. We have, however,
here assumed that the Councils, in the work of promoting the
interests of their own industries, will have regard for the national
interest. If they fulfil their functions, they will be the best builders
of national prosperity. The State never parts with its inherent
overriding power, but such power may be least needed when
least obtained. — Whitley Report.

147

148 NATIONAL GUILDS AND THE STATE

Mr. Hobson's method of Guild propaganda reminds one of
the furniture company's advertisement — " It's so simple." . . .
And simple it all is if you can accept two large assumptions. 1 he
first is the easy transition from Industrial Unionism to the pro-
ducing Guilds, a phase which deserves harder and more technical
work than it has yet received. — The Nation.

We cannot regard human beings as if they were merely so
many units of brain-power, so many of nervous or muscular energy.
We must co-operate with them, and trust them as we ourselves
should wish to be trusted. This position involves the surrender
by Capital of its supposed right to dictate to Labour the conditions
under which work shall be carried on. It involves more : the
frank avowal that all matters affecting the workers should be
decided in consultation with them, when once they are recognised
as members of an all-embracing human brotherhood. — Report of
a Conference of Employers, chiefly members of the Society of Friends.

May I be permitted to make a proposal which may serve as a
step in this direction ? Let the Government announce that they
are prepared to grant a Charter to any industry in which the
Masters' Federation employs 75 per cent of the workpeople and
the Trade Union represents 75 per cent of the operatives, providing
that application is made jointly by the two bodies, which Charter
shall, inter alia, make it illegal for anyone but members of the
Trade Union to be employed in the industry, or for any employer
to operate unless he is a member of the Trade Association. — Mr.
T. B. Johnson, a Managing Director, in Land and Water,
June 12, 1917.

I. The Living Organism

The correspondent cited above understands that
National Guilds is not a cut-and-dried scheme, but
rather a series of proposals based on the principles which
have been discussed in the first part of this book. There
are others of a more literal turn of mind who look askance
at principle and ask for something practical. There
are yet others who, having satisfied themselves that the
programme adumbrated is logical, expect it to be rigidly
adhered to, denouncing all variations as heretical.
The two latter types forget that we are concerned
with a vast living organism, all its parts evolved
in the slow process of time and by patient, human

SIGNS OF CHANGE 149

effort. They convey the notion that society is a
mass of clay, of varying degree of plasticity in its
several strata, and only awaiting the impress of the
Guild mould. If, in moments of despondency, we
regard society as unresponsive clay — " finished and
finite clods untroubled by a spark " — we speedily
discover our error if we touch any of its myriad nerve-
centres. But, since society is a living organism, it
often contracts ailments that call for treatment, diseases
that need the surgeon's knife. As in the individual
life, so in the social, we must prudently consider if a
surgical operation is inevitable. If yes, then Danton's
advice holds sure — audacity, and yet again, audacity.
The great revolutions of history, heroic and picturesque
in many of their aspects, are mainly distinguished by
prudent calculation. Necessarily so ; for there can be
no revolution without success — it is otherwise futile
insurrection — and success demands prudence, foresight,
and calculation, as well as courage and audacity. A
revolution is, of course, a surgical operation ; but It
also marks a stage of evolution, — Is a phase of the un-
ending process of evolution.

If, in the future, the Guild life, with all that it stands
for, finds its purposes frustrated by recalcitrant elements,
then there must be a revolution. In the meantime
it is wiser to presume the sway of reason. On two
grounds : because the nation may willingly accept a
reasonable solution ; because, if revolution become
inevitable, sagacious citizens must be convinced and find
themselves ranged against the selfish Interests. The
Guildsman has everything to gain and nothing to lose
by resorting, first and last, to reason.

In the long-extended gamut between the theoretical
and the immediately practicable, it is difficult, if not
impossible, to indicate precisely the present position
of the Guild idea. It will not be denied that It springs
from a theory which has been thoroughly explored ;
I shall adduce evidence that this theory is not in the

I50 NATIONAL GUILDS AND THE STATE

air, but is rooted in the reality of the practical activities ;
that there is a significant correspondence between
this theory and the facts of life, as they disclose them-
selves to the discerning eye. We are concerned with
something that is not only palpably in the stream of
tendency, but is sufficiently explicit in its main outlines
to warrant us in regarding it as a definite scheme of life.
Yet not so definite, so clear-cut, as to preclude constant
amendment and variation ; not so specific that it cannot
absorb new discoveries in the realm of thought ; not so
dominant that it cannot adapt itself to new developments.
There is no Guildsman so blind that he cannot appreciate
the fluidity of social and economic life. Fundamentally,
there is one thing he cannot forswear — the uncompromis-
ing rejection of the commodity valuation of labour. If
a surgical operation become imperative, it will be the
extirpation of wagery.

The following survey of the factors of transition
will strengthen our conviction that, under capitalism,
economic power precedes, governs, and (on due occa-
sion) subdues to its own ends political and social life ;
that, as Western Civilisation is, as I write, resisting
an autocratic hegemony, so it must ultimately also
resist and crush the anti-social hegemony of capitalism.
But we shall also discover that as the disappearance
of the autocratic and capitalist hegemonies, whilst
freeing mankind from the duress of class domination,
nevertheless involves the most extended inquiry into
the true relations between the social and economic forces.
That is to say that, however primary may be the industrial
factors in the development of National Guilds, we must
also measure their reactions upon the national life as a
whole.

II. The Factors in Transitio

N

In discussing transition, my method, however
logically dangerous, must be inductive. The theory
has already been deduced and stated ; my task now

SIGNS OF CHANGE i^i

is to see how far the facts chime with the theory ; if
industrial and social developments, so to speak, meet
the theory half-way : whether, in fact, the inferences
from the abstract and the practical merge into a philo-
sophic unity.

For our easier guidance, let me take a bird's-eye
view of the factors to be discussed in subsequent chapters,
(i.) Having regard to the economic nature of
National Guild proposals, it will be convenient to con-
sider first their industrial aspects. I must discuss in
detail, which I hope will not prove too tedious, develop-
ments in the workshop as they affect the argument.
Since the abolition of wagery spells a new and higher
status for the workers, it will be necessary to examine
the present attitude of the Trade Unions to existing
workshop practice. Coming more specifically to the
workshop, we must ascertain precisely the real bearings
of the shop-steward movement, its relation to the Trade
Unions, its probable influence upon amalgamation,
its attitude to management, its effect upon foremanship.
But as National Guilds predicate the inclusion of all
the workers in the industry, we must push our inquiry
further, and ascertain whether the counting-house is
loosening in its allegiance to management and finding
community of interest with the workshop. Nor does
that end our journey : we have still to inquire whether
the management is so closely attached to the proprietary
that the bonds cannot be broken. Finally, there is
the pertinent query whether the proprietary itself has
any economic function to warrant its continuance.

(ii.) If we distinguish Commerce from Industry by
assuming that Commerce buys and sells what Industry
produces, it is a vital part of our problem to serve upon
Commerce our quo warranto. In the ensuing trial the
true elements of exchange must be carefully scrutinised
and their relation to home and foreign demands defined,
(iii.) As under capitalism Finance plays an important
role, influencing Industry and affecting Commerce, the

152 NATIONAL GUILDS AND THE STATE

time is ripe, and over-ripe, to decide whether the control
of money and credit is, or is not, now on an inequitable
and unstable basis — an instability illuminated, if not
accentuated, by the war.

(iv.) The problem of agriculture, apt to be neglected
in our industrial preoccupations, must next be considered.
Important and fundamental though it be, we may find
it not so germane to our inquiry as many expect. Its
peculiar organisation renders it a problem in itself.

(v.) Next we must see what organic changes are
pending in the Civil professions •, if their tendency is
to move from their old individual base to the associa-
tive — the doctors, the engineers, the lawyers, the
teachers, the chemists, the Civil Service. If the pro-
fessions are at last finding their immediate safety in
organisation, it will be for the Guildsmen to find whether
such organisation hides a purely artificial condition, or
whether it can be related to function. In any event,
it will be essential to our future welfare to make sure
that these professions serve a public purpose. That
done, we shall see the Civil Guilds in process of forma-
tion, and their future secured, in part, no doubt, by
organisation, but mainly and permanently in function.

(vi.) My inquiry would be incomplete unless I can
promise my readers that education is coming into its
own. Both civic and technical education, now strug-
gling in hopeless confusion, must be analysed into
their appropriate spheres of work. We can then test
the accuracy of Guild doctrine in regard to future
spiritual, intellectual, and practical thought.

(vii.) Nor can we avoid glancing at the post-educa-
tional factors that play their part in our cultured life,
notably the Press and our system of publishing.

(viii.) The industrial advent of woman, followed by
her speedy reception into the political family, cannot
be ignored. I must try to understand how far her
presence in industry may tend to prolong or shorten
the duration of wagery. But, since spending and

SIGNS OF CHANGE 153

distribution are essential economic functions, of prime
importance to the moral and material life of the com-
munity, I shall be thrown back upon an inquiry into
the value and necessity of home -building as a factor
in National and Guild Life.

Our survey of these various factors must bring
me again into contact with the State, the Administration,
and the production and distribution of wealth. I can
then test the theory of the spiritual State and the func-
tional Government by ascertained facts. I suggest to
the sceptical that if this inquiry be sincerely pursued,
the result must either destroy the idea of National Guilds
or finally establish it as a vital principle and process in
our national life.

III. The Political Factor

I have already remarked that with wage -abolition
all polemics based on the capitalist regime cease and
determine. The most important of these is that
economic power precedes and dominates political
action. But this capitalist aphorism may persist with
a new meaning. Its present significance is found in
the historic fact that capitalism has directed politics
to its own circumscribed purposes. The power it
exercises is, strictly considered, only economic in a
secondary sense ; in military jargon, it is an " opera-
tive corner " in a vast army of economic units. The
conditions of its success are found, not specifically in
its economic power as such, but in its capacity for
swift mobility at the point of attack or of danger. It
is economic in the sense that organisation is economic,
in the sense that Trade Union organisation bears certain
economic fruits. But if capitalist or Trade Union
organisation merely exploits economic conditions, it
may be proved to be uneconomic, or even anti-social.
We have found by experience that Trade Unionism
tends, in fact, to the increased production of wealth.

154 NATIONAL GUILDS AND THE STATE

mainly because it has raised, within certain limits, the
standard of life, and, therefore, improved Labour's
capacity for production (expressed in the phrase " the
economy of high wages "), and partly by its maintenance
of the reserve of labour, generally known as the un-
employed. That is to say. Labour organisation plays
a definite and desirable part in our national economy.
On the other hand. Capitalist organisation has mainly
restricted itself to class aggrandisement. Labour organi-
sation has benefited the community, and is, therefore,
national in its scope and purpose ; Capitalist organisa-
tion has strengthened the master-class, and is sectional
in its economic and social effects. We must not read
motive into this generalisation : the different results
that flow from Labour and Capitalist organisation
are inherent in the principles that guide them. Labour,
if completely organised, brain-workers included, would
practically represent the nation ; the essence of Capital-
ism is that it claims for itself all surplus value, and is,
therefore, anti-national in the same sense that Labour
is national — it seizes for itself the daily heritage of the
community. But, being a class compacted of special
interests, it can mobilise quickly and form an " operative
corner," both in industry and politics. With wage-
abolition comes the dissipation of surplus value, and
the capitalist class is undone. Since the origin of the
phrase " economic power precedes and dominates political
action " Is found In the domination of the master-class
in the political sphere, it follows that this particular
polemic disappears with the disappearance of the class
that gave It life and substance. It does not follow that
the ensuing diversion of economic power renders It
impotent in politics; It means, however, that economic
power becomes truly national, and, in consequence,
the face of politics is changed beyond knowledge. We
pass from a class-struggle to a movement for the recogni-
tion and balance of function.

If we look beyond the anomalies and crudities of

SIGNS OF CHANGE 155

Labour's political action, we shall find, I think, an
explanation of much that seems incomprehensible or
tortuous in the fact that it is compelled to take a much
broader view of policy than need the capitalists. This
view, whatever it may be, must not be narrower than
the interests and sentiments of its supporters. It is
not the narrow view that handicaps it ; it is the essen-
tially wide view that loses depth and intensity. The
prevailing misconception that it represents class interests
is due to the form of its organisation, and not to the content
of the ideas it expresses. But it lives in a perpetual
dilemma : it instinctively realises the supreme value
of communal life, because its own life coincides with
and touches at every point the borders of the community,
whilst in politics it has to work in an atmosphere and
psychology, the emanations of the capitalist system and
creed. Its instincts lead it to untrammelled function,
to free play for every job ; politically it is compelled to
accept the capitalist assumptions and argue its case, not
on the assumption of wage-abolition but on the con-
tinuance of wagery. It is the pilgrim in the fable,
struggling to pass through the doorway screened by an
invisible curtain. Not till it draws its good sword
" wage-abolition " can it cut its way through to fresh
air and freedom. But the sword must perforce remain
in its scabbard until Labour understands — what Capital-
ism enjoins — the priority of economic power in existing
circumstances.

The political history of Labour enforces the truth of
this. From the early days of Alexander Macdonald
and Thomas Burt, the political power of Labour, both
in and out of Parliament, has followed, is in fact the
sequel of, economic power expressed in organisation.

It would, indeed, be a happy issue of all our troubles
if this were the whole truth of the matter. Merely to
capture Parliament with a Labour majority would
obviously not suffice. Although related, the economic
and political media are different. It is conceivable, I

156 NATIONAL GUILDS AND THE STATE

fear by no means improbable, that the Labour majority-
might merely carry on the political traditions of its
predecessors, as was the case in Australia. The
problem is to correlate the political revolution thus
accomplished with economic realities : to give legal
form and civic consent to the new industrial system.
To achieve this, ideas must be added to numbers ; the
legions will miss their way and be thwarted of victory
without good Staff work.

During the past decade, there can be no doubt that
distinctively Labour problems have obtruded into con-
ventional politics, whilst war-pressure has brought
those problems into unexampled prominence. Not
once nor twice has it become imperative for the Prime
Minister himself to intervene in Labour disputes. It
has been deemed vital by the governing classes that
Labour should be represented in the War Cabinet ;
that it should also be adequately represented in the
Government by Ministers at the heads of various Depart-
ments. Government offices are now honeycombed by
Labour men and women. The precedents thus created
cannot but influence future affairs to an extent not now
realised. But the lack of industrial statesmanship
has fatally affected Labour, not only in the question of
dilution (itself enormously important), but in its failure
to evolve a political policy in any sense responsive to
the industrial situation. In other words. Labour has
been at the mercy of conventional politicians, who do
not understand that Labour politics differ in substance
and purpose from the politics of the master-class, whose
habits and tendencies they ape without bettering. This
is due to the mistaken belief that political action takes
precedence ; it is a failure to relate politics to economics.

Broadly stated, there are two lines of action that
Labour must pursue : it must apply to its problems
the sovereign principle of wage-abolition — the rejection
of the commodity theory ; sequentially, it must work
out in detail all that is involved in the functional theory.

SIGNS OF CHANGE 157

particularly aiming at such a balance of functions in
every department of national life that practical equality
in status and pay may be secured. Not until this is
accomplished can we with truth declare that economic
power is the servant and not the master in our national
affairs.

IV. Conventional Politics

It is extraordinarily difficult to contrast conven-
tional politics with the silent forces that move the
Labour masses to thought and action remote from the
formulae that pass muster in Parliament and the Press
for Labour politics. A striking illustration is found
in the life of Sir Charles Dilke. This man, who com-
bined monumental knowledge with delicate appercep-
tions and inexhaustible enthusiasms, was often spoken
of as a possible leader of the Labour party. After
having sacrificed the rich maturity of his experience
on the altar of British hypocrisy, he steadily maintained
his interest in the political issues commonly associated
with Labour politics, winning back, in large measure,
what he lost in a cause celebre. In his later years, both
before and after his emergence, he acted as friend and
counsellor to literally hundreds of Labour leaders,
who sought him for the information he possessed, and
the sureness of his political touch. His biographer.
Miss Gertrude Tuckwell, tells us that " the main purpose
of his life was ' to revive true courage in the democracy
of his country.' For the protection of toilers from their
taskmasters at home and abroad, in the slums of industrial
England and the dark places of Africa, he effected much
directly ; but indirectly, through his help and guidance
of others, he effected more ; and in the recognition of
his services by those for whom he worked, and those
who worked with him, he received his reward." ^

All through his political life he believed profoundly

1 The Life of Sir Charles TV. Dillte, by Gwyn and Tuckwell. (London : John
Murray.)

158 NATIONAL GUILDS AND THE STATE

that Labour must seek its cures through politics. "With
this guiding principle it may be asserted that there
was no legislative proposal aiming at Labour's easement
which he had not thoroughly examined. As Chairman
of the Industrial Remuneration Conference (1885),
he was converted to the legal limitation of working
hours ; we find him busy all through his political life
on housing and other municipal projects ; he was
among the first supporters of the taxation of unearned
increment ; he demanded fixity of tenure and fair rents
fixed by judicial courts ; he became a coUectivist after
the heart of Mr. Sidney Webb. It was on this pro-
gramme that he was elected to Parliament by a mining
constituency. Never had political Labour such a power-
ful and instructed champion. Nor did he boggle at
a Labour party independent of Liberalism and Toryism.
On the contrary, there seems some evidence that he
engineered the way for the I.L.P. Lady Dilke spent
time, energy, and money on the development of women's
Trade Unionism, whilst both of them were assiduous
in their attendance at the Trade Union Congress and
other Labour conferences. If his great abilities in the
end were deprived of their full scope, it is possible that
Labour got from him more intense support and effort
than would have been the case had his energies been
spread over foreign affairs and a score of other political
problems not peculiarly Labour in their tissue. He
died in January 191 1. To his family came " messages
from every Trade Union and organisation of wage-
earners, letters from men and women in every kind of
employ, testifying of service done, of infinitely varied
knowledge, of devotion that knew no limit, and that
had not gone without the one reward acceptable to the
man they honoured, their responsive love and gratitude."
The last five years of his life, when political Labour
seemed triumphant, scoring one political victory after
another, was a period of unprecedented prosperity.
Rent, interest, and profits rose 22 J per cent ; British

SIGNS OF CHANGE 159

capital went in predatory millions to every quarter of the
globe — to South Africa and South America, to Canada's
great land boom. Issues were applied for many times
over ; new industries grew, gourd-like, in a night. There
was but little unemployment, and that was not acute.
Yet, in these particular years of mounting profits, the
Board of Trade, a few months after Sir Charles Dilke's
death, informed an incredulous world that real wages
had fallen from 7 to 10 per cent, prices and rent ad-
vancing from 10 to 16 per cent. Nor is that all : the
period culminated in a series of strikes amongst the
miners, railwaymen, and transport workers that seemed
to portend a veritable revolution.

The curious thing about these strikes was that the
political Labour party frowned upon them : averred that
they were bringing it into disrepute : sought a settle-
ment on disadvantageous terms.

An analysis of the anomalous position here indicated is
not difficult. The politicians, immersed in purely political
affairs, breathing the political atmosphere, thought only
of reconcilement, of terms aiming at agreement between
Labour and Capital, necessarily based on the continuance
of wagery. Labour was hurt and protested by industrial
methods ; the politicians were liberal in their admonitions
and sedatives — " strove with anodynes t'assuage the
smart, and mildly thus their medicine did impart." Sir
Charles and his Labour coadjutors had put the political
cart before the economic horse ; neither then nor now
had they grasped the vital truths that spring from wage-
abolition and the functional principle that relates it to
practical affairs. The story of those delusive years is
the epitaph of conventional politics.

V. The Governing Classes

Although the governance of a country must, in the
ultimate, respond to the economic power behind it, we
must also recognise that political power tends to remain

i6o NATIONAL GUILDS AND THE STATE

in the hands of the governing classes, who, with great
or little wisdom, trim their sails and set their course
in such wise that they continue to govern. The son
inherits, but the family solicitor continues. The in-
experienced son is naturally slow to insist upon his
own way against the advice of his men of affairs, who
work on precedent and tradition. The governing
classes administer for the man in possession. They
are careful not to antagonise him, but, if they dislike
him or his ideas, they know how to thwart and reduce
his policy to nullity. When, however, the man in
possession feels his feet and realises his power, he makes
changes in -personnel to encourage the others. Gradually,
in the course of years, his administrators conform to
his wishes and the changes take effect. This is particu-
larly the case in politics. Government is a function
to which many families devote themselves, in the higher
reaches of politics, in the lower reaches of the Civil
Service. It is this class-continuity in government that
disconcerts both the revolutionist and progressist. A
great political victory is won ; the governing machine,
manned by the governing classes, works on unperturbed.
When Chamberlain and Dilke were the popular pro-
tagonists of the Liberal Government, they carried no
weight in the Cabinet, which was under almost exclusively
Whig domination. These Whigs knew that, since
Administration was under the control of their family
connections, they could impose their will on the Radicals
by the simple expedient of frustrating either legislation
itself or its administration. Notwithstanding three re-
volutions, there are to-day in France men in the Civil
Service whose fathers, grandfathers, and great-grand-
fathers were there before them. Whatever the vicissi-
tudes of government, they have outwardly conformed.
The Vicar of Bray was not unique ; he was a type. In
the conquest of economic power, to which National
Guildsmen are committed, we must have regard to the
attitude of the governing classes ; must compel un-

SIGNS OF CHANGE i6i

questioned obedience to the new order, on pain of
swift dismissal. Here, again, it will be observed, the
functional principle enters and cannot be ignored.
Government is a function ; but unless strictly subject
to the will and policy of the citizen-State, it becomes a
tyranny. An economic revolution unguided by sound
citizenship may also become a tyranny.

A biographical analysis of the governing classes
would, I think, disclose a fact of some importance :
that in these classes we discover the deposits of pre-
vious dominant interests ; that they represent economic
power- as a factor not fixed and determinate, not uniform
in origin, but heterogeneous, the historic expression of
power developed in different periods, merging into each
other with conservative reluctance, under the force
majeure of new ideas, new inventions, new methods, and
an ever-widening horizon of new worlds to conquer
and exploit. Under the surface unity of the governing
classes (unity only operative when class-rights are
threatened or invaded), we shall find new conceptions
jostling ancient ways, modern enthusiasms at grips with
old loyalties, a tumult of contending principles and
philosophies, softened by social conventions acquired
at the universities and public schools ; a governmental
club bound together by loyalty to the existing social
and economic system, but otherwise exercising intel-
lectual liberty. It is this diversity of intellectual con-
viction that lends glamour to the life-stories, papers,
and letters of the leaders of the governing classes. It
is this diversity of outlook, expressed in conventional
politics, that distracts men's minds from the sterner task
of achieving a true democracy.

There is thus a blending of past and present power
in the governing classes. Amongst many confluent
influences, the predominant are the Tory, pur sang,
the triumphant Whig, who has known how to make
the best of both worlds, the earlier manufacturing
families, now intermarried with their former masters,

M

1 62 NATIONAL GUILDS AND THE STATE

and a sprinkling of the more adaptable nouveaux riches.
These strains not only persist in politics but are reflected,
through family cadets, in the purely administrative
offices. But their aim is not only to govern and ad-
minister ; they also set the tone of more serious and
responsible Society ; they have constituted a code of
morals and manners, exclusive enough to kindle in the
rising man an ambition to enter the select circle, yet
not so exclusive as to create for themselves a too obvious
prominence and isolation. Bebel noted it, remarking
that bourgeois leadership in Great Britain was the most
acute and politic of any nation. But he who wins through
to membership in the governing fraternity must play
the game or pay forfeit. Sir Charles Dilke's promotion
in the hierarchy was barred for many years because he
took a Radical line on the Civil List. When Chamberlain
welcomed John Bright at a great demonstration in Bir-
mingham, he said that they were all the happier for the
absence of royalty and the trappings that go with it.
Queen Victoria vented her displeasure and the harmless
speech gave Gladstone endless trouble in composing
the quarrel. The theory of it is not without interest.
The Crown is the symbol of government ; therefore
Ministers are directly the servants of the Crown and
must do nothing to depreciate its authority. In and
out of Parliament, this rule is the prime factor, the supreme
principle to which the governing classes must bow. In
the early 'nineties, a ghastly mine explosion coincided
with some Royal domestic event. The Leader of the
Commons, on giving notice of a vote of congratulation,
was also asked to move a vote of condolence. He
declined : the two events were not on the same plane.
Recently, the Leader of the Commons, on giving notice
of an address of congratulation to the King on his silver
wedding, was also asked to move a vote of congratula-
tion upon the events connected with American Inde-
pendence Day. He declined. Nor was it empty
convention that led the Prime Minister to say : " The

SIGNS OF CHANGE 163

stability of the Throne is essential to the strength of
the Empire, for it is not merely a symbol of unity, it
is in itself a bond of unity." The stabiHty of the Throne
is, in fact, 'essential to the continuance in power of the
existing governing classes. In an economic democracy,
a monarchy is not only incongruous but impossible ;
citizenship itself assumes the sovereign quality. It
was too much to ask ; the official elements could not,
without stultifying themselves, at once congratulate a
monarch and celebrate the foundation of a republic.

As a general rule, the governing classes contrive
to cover their policy and purposes by associating them-
selves with popular ideas and sentiments. At this they
are past- masters. Occasionally, however, there are
indiscretions when we see their real attitude towards
the wage -earners. The most recent case is Lord
Ribblesdale, a wayward Whig of unusual ability. His
son, Charles Lister, born in 1887, a lovable youngster
of generous impulses, flashed among the stars of the
I.L.P., scattering his largesse of exuberant youth and
spiritual resilience among those drab sentimentalists.
From transient membership of the I.L.P. he passed
into the Diplomatic Service, being attached in turn to
the Embassies at Rome and Constantinople. At the
outbreak of war he joined the Naval Division, was
several times wounded, declined to return to the Foreign
Office, went back to the firing-line, paid the final price.
As he lay dying, he browsed dreamily amongst his
favourite books — the Purgatory of Dante, the Oxford
book of Italian verse, the Life and Works of Goethe, a
D'Annunzio novel, and the Imitation of Christ. He
was buried at Mudros, almost within sound of the heavy
guns. A memoir, written with admirable restraint by
his father, has now gone through several editions.^

Lord Ribblesdale tells us that they were neither
pleased nor displeased when his son joined the I.L.P.
" His mother thought it a mistake to contract himself

1 Charles Lister, Letters and Recollections. (London : Fisher Unwin.)

1 64 NATIONAL GUILDS AND THE STATE

out of being helped by the machinery and caucus support
of either of the two great recognised parties — at that
time a condition of adoption and grace — but she was
reassured by Mr. A. J. Balfour, who was mildly interested
and approving. Indeed, he pointed out to her that
Charles would get all sorts of experience and some sort
of special knowledge which might be of more use to
him in after life than if he kept Selling Platers or ran
an actress. I was present and heartily concurred."
" Either of the two great recognised parties ! " It
" might " be better than " running an actress " ! Could
contempt for a Labour organisation further go ? But
now for the young man himself. " He never weakened
in his liking for the landed gentry, the amusements of
the leisured, and the Anglican clergy. Even the one
or two important nobles whom from time to time he
encountered did not appear to make any disagreeable
impression on him ; indeed he often commended their
spacious ways of providing good outdoor pleasures and
good fare for themselves and others." A year or two
after we find him in Rome, under the courtly tutelage
of Sir Rennell Rodd, the British Ambassador. This
gentleman, who is supposed to represent all sections of
the British nation, quotes approvingly the late King
Oscar of Sweden : " A young man who has not been
a Socialist before he is iive-and-twenty shows that he
has no heart ; a young man who remains one after
five-and-twenty shows that he has no head." From
which we may infer that kings and ambassadors may
have neither heart nor head. In August 191 1, Charles
Lister, writing to a young fellow-aristocrat, caps the
story of his Socialist adventure : " It is appalling. I
feel the Labour grievance as strongly as ever, but I've
lost faith in most of the remedies I used to believe in.
If only they could get back to the old sober trade
unionism and to collective bargaining on the same
lines. But a change of spirit in most of the trade
unions is required before this is achieved. They are

SIGNS OF CHANGE 165

shockingly out of hand — except the miners and the great
cotton-trade organisations."

I prefer to think that the phrase " shockingly out of
hand " was not his own ; that it came from the
Ambassador's dining-table. But what a flood of light
it all throws upon the ruling powers' attitude towards
the patient mass of Labour that really constitutes the
nation ! No vulgarian family this : every member of
it seems trained to a spacious life, to high thinking, to
art and literature. Yet to them this connection with
Socialism of the mildest type is an amiable adventure,
not to be taken seriously, better on the whole than
Selling Platers or running an actress. Finally, the
dominant trait will out — " they are shockingly out of
hand 1 " Unhappy Charles Lister. " When he heard
this, he was very sorrowful : for he was very rich."

We may surmise that the influence of the Foreign
Office, with its detached views of sectional life, had
brought our young Socialist hero to a love of more
flaming affairs than the pedestrian business of wealth
production and distribution. " I love my work and
am thrilled by Weltpolitik" he writes to a friend. The
governing classes have been at considerable trouble to
keep the Foreign Office as their special preserve. Not
without good reasons : for they are not only national,
they are international. Their birth and training give
them the entree into the governing houses of Europe
and America ; they intermarry ; they have interests in
common, notably as bond-holders, who levy tribute on
all the toilers of the world. They know how to speak
to their international brethren ; deep still calls to deep.
Be assured, too, that foreign policy must profoundly
affect home affairs ; on due occasion forces domestic
politicians to be silent and to impose silence on the hoi-
polloi. The workers must observe discipline : must not
get " shockingly out of hand." At the height of the
Dreyfus tumult, Caran D'Ache pictured in a cartoon
French public opinion as a great boulder of granite.

1 66 NATIONAL GUILDS AND THE STATE

One tiny corner of it represented the intellectuals. The
same boulder would do for the control of foreign policy.
Almost invisible, a mere speck, would be the Henderson
mission to Petrograd, the first breach, so far as I know,
into the aristocratic control of foreign relations. We
need hardly be surprised that it was rendered abortive ;
the governing classes saw to that. What would happen
if official Labour missions were encouraged I Democratic
diplomacy would sound more than one funeral knell.

Certain though it be that economic power shapes
political action, it is well that Labour should understand
that our present rulers have covered the national dish
with a hard crust difficult to break. " Upper crust "
is more than a Cockney term ; it is a reality. The
breaking of this crust is part of the Labour programme ;
a task that must automatically follow each stage in the
conquest of economic power ; that can only be accom-
plished by transmuting its acquired power into a
triumphant and sovereign citizenship.

VI. The Solvent of War

Difficult though it be, it is essential to discuss the
case for National Guilds on the assumption that we are
living in normal times ; that there are neither wars nor
rumours of wars. Difficult ; impossible rather : for
the war has entered into our being ; will leave behind
legacies and influences whose effects will be felt for all
time. Rash indeed is he who claims to foretell those
effects ; the sparks fly from the anvil in ways unforeseen,
some on tinder, from whence fire may spread with
flaming tongues. The permanent results of the war are
yet to seek ; what seems permanent may be but transient ;
what seems insignificant may prove to be the cloud no
bigger than a man's hand. It is probable, though by no
means certain, that those things which have passed into
our language as definite terms will be the most enduring.
We instinctively seize upon the essentials and give them

SIGNS OF CHANGE 167

distinctive names ; our vocabulary springs from some-
thing deeper than surface reason ; we feel before we
analyse ; language comes before grammar. Thus
safeguarded from the dogmatic, with no pretence at
prophecy, I may perhaps suggest future problems by
applying this language test.

(a) Man Power.

Much intellectual water has flowed under the philo-
sophic bridges since Swinburne sang : " Glory to man
in the highest, for man is the master of things." Those
were the days of Mazzini and Walt Whitman, when
man was deemed triumphant over time and circumstance ;
when the possibilities of the soul of man were canvassed
in no theological spirit. Now we are confronted with
Senor de Maeztu's declaration of the primacy of things.

Critics affirm that this is a war of machinery. The
engineer claims that we must look to his skill for
victory. " Protect me from active service, supply the
raw material, and I'll win the war," he says. So, in
large measure, we retained him in industrial employ-
ment. He produced tanks, aeroplanes, guns, boats,
bridges, military stores of every kind, which were sent to
the front. A prodigious effort. But the soldier reflects :
" What," he asks, " is the value of these monstrous
accumulations of material if the enemy can walk through
and capture it .'' " The statesman also reflects : " How
am I to produce all this machinery without men. Samuel
Butler wrote of machinery producing machinery as
women bear children. Not yet ! We must have men.
If not men, then women." Both the soldier and the
statesman reflect : " Here are men and material. Of
what avail are they without brains ? You cannot have
brains without men." Thus, whether or no it be a war
of machinery, the national instinct does not crystallise
into " machine power " ; " man power " is the cry that
wells up through the conscious from the subconscious.

1 68 NATIONAL GUILDS AND THE STATE

Not machine power, and curiously enough not
"Jabour power." It is an unconscious rejection of the
commodity theory. It is not the labour commodity the
Army asks for ; it is men. Neither is it the labour
commodity that munition factories demand ; it is men.
The Army says : " We want men who will do and
dare ; not so much human energy carefully calculated
at so much per day." The munition factories say :
" We are not putting labour on a commercial or com-
modity basis. True, the wage-system continues, but
wages are now of secondary importance ; what counts
is the national safety ; men are more important than
commodities — even than the labour commodity." The
economic distinction between man's body and the labour
power in it, which puzzled Marshall, which is vital to
the commodity theory, has been torn to shreds in the
violent reactions of war.

Then, again, there is a group of problems revolving
round the conservation of man power. In the Army
the Medical Corps is busy estimating the percentage
of casualties it returns to the fighting front. Is it 6^
per cent ? Make it 70 per cent. The cost .'' Never
mind the cost. If you can make it 75 per cent, then
double the cost. Can you make it 80 per cent .'' Then
treble the cost. Remember that the really important
thing is man power. In munition work the doctors
are carefully indexing results of strain. There is now
a small library on industrial fatigue. Man power is
precious ; how foolish to strain it beyond endurance !
Present man power : the future also. Never before
have we looked so anxiously at the birth-rate. Recently
it was proclaimed with elation that Great Britain is the
only European country with a rising birth-rate. Even
illegitimate children are not now ignored ; the un-
married mother is no longer scorned. Not because of
her enigmatic eyes ; she is the mother of a child. Better
still, of a man-child.

SIGNS OF CHANGE 169

(F) Dilution.

The original meaning of "dilution" has been diluted.
We know the word in chemistry and industry. The
dilution of spirits is known to drinkers ; the conscious
and deliberate dilution of labour is a new phenomenon.
Historically considered, it is a corollary to man power ;
in fact, it is a recognition of the existence in our midst
of untrained labour and an assertion that we can maintain
production with a minimum of skilled labour plus a
maximum of automatic machinery and unskilled labour.
It is a challenge to the craft unions. It will be necessary
to examine, in some detail, the economic effects of
dilution. I shall not now prejudge the results of my
inquiry, beyond warning industrial craftsmen that their
claim to craft monopoly rests on a dubious foundation ;
that their economic strength is more surely found in
organisation than in skill. The skill is undoubted ; the
point is that it is either widely spread or more easily
acquired than the craftsmen would care to admit. In
my own experience, I have met many employers who
prefer to retain their dilutees when the time comes for
them to make way for the returning craftsmen. This
is no revelation to those who have watched industrial
developments during the last twenty or thirty years.
The adaptability of the average Englishman in mechanical
pursuits has been proved time and time again.

(c) Rations.

Without verifying my references, I suspect that
every dictionary in existence would relate rations to
victuals. Like dilution, the war has widened its mean-
ing. We ration food ; we also " ration " wool, cotton,
coal, metals ; we are now discussing the " rationing "
of clothes ; when the " embargo " was put upon
certain munition firms, we wrote almost naturally of

170 NATIONAL GUILDS AND THE STATE

rationing " men. The word has come to mean equality
of opportunity. If the war were to continue indefinitely,
It would involve actual equality in the necessities of
life. By mismanaging their diplomacy — a function
they jealously retain in their own hands — the governing
classes may even yet be compelled to pay the price of
equal rationing, without regard to unequal incomes.

If I were disposed to prophesy, it would be to affirm
that^ the most significant legacy left by the war will be
the idea upon which rationing is based. Fundamentally,
it is economic democracy ; from the idea of rationing,
one can argue not only for class equality but for equality
of pay. In war we are all in it together ; yes, but also
in peace.

{d) " The Democratic Nations."

A few Bourbon remnants excepted, our political
leaders have now unanimously declared for Democracy.
Circumstances have driven them to it. The only way to
induce the workers to join in the war was by assuring
them that Democracy was in danger. And so it was.
As the war proceeded, it became clearer that we were
fighting an autocracy. The governing classes therefore
had to denounce the autocracy ; they must not, whatever
the cost, be tarred with the autocratic brush. Mr. Balfour
went to America ; doors were thrown wide open to him ;
he was charmed. " Surely," he thought to himself,
" this is better than Germany or Russia. The one is
coarse and the other cold." So he proclaimed himself
a democrat. The Colonies, too, had to be considered ;
Australia and Canada were in no mood to suffer aristocrats
gladly. We were in alliance with France ; subsequently
with America. Democracy became the word. Nothing
more than political democracy, Men entendu.

Not only the word but its political implications have
pierced the circle of the governing classes. Nothing
alarming or significant in it ; British, French, Italian,
and American capitalisms have thriven, each in its own

SIGNS OF CHANGE 171

way and all in common, upon political democracy. But
man power is an economic problem ; dilution is an
economic problem ; rationing is an economic problem ;
the idea of democracy knows no frontier between the
political and the economic. War is certainly a potent
solvent ; it is our business to understand and apply
the solutions it throws up from the depths of its
cauldron.

II

THE WORKSHOP

I. Part and Joint Control

The point of my present inquiry is to ascertain how far
industrial developments coincide with National Guild
principles. The essence of those principles is Labour's
monopoly of labour ; their logic implies absolute and
not part control of labour — from the earliest stages,
when variations of practice shade into obvious change,
when change finally marks a definite development.
Thus, from the Guild standpoint, absolute control over
ten square yards of a factory is more consistent with
Guild theory than part control over the whole establish-
ment. Like all sound theory, this has its practical
application. Part control is a compromise ; once
admitted, it is extremely difficult to disperse. Between
the absolute, and the partial, and representing another
train of ideas, we shall sooner or later encounter joint
control, the real beginning of Labour's responsibility in
industry. The gravamen of the Guild criticism of the
Whitley Reports is, not only that they begin from the
top instead of from the bottom, from the Board Room
instead of the workshop, but that they vitiate ah initio
the idea of absolute control, even in its most tentative
forms. But the form of control must ultimately be
determined by the relative strength and efficiency of
Management and Labour. Whatever its guise, control
is inevitable.

172

THE WORKSHOP 173

We cannot appreciate the transitional aspects of
workshop practice without a short retrospect. In 1 9 1 1
and 19 12, when the Guild pioneers were formulating
National Guild principles, the prospect of any kind of
workshop control, absolute, partial or joint, seemed
remote. To entertain the idea was an act of faith. The
employers had barely become accustomed to the general
recognition of trade union terms ; they were still firmly
convinced that they were masters, in every sense of the
word, inside the walls of the buildings they had erected.
It had never occurred to them that the provision of
those buildings was an implied contract between them-
selves and their employees. They had drawn the
workers from their old home crafts by subtle inducements,
notably a place where men could with enhanced economy
work in common. As time passed, the State and the
local authorities jointly imposed a sanitary standard,
subsequently limiting the hours of labour in certain
industries. The community said : " If your employees
must work in your factories, you must provide decent
accommodation ; nor must you work them excessively
long hours, without our knowledge and consent." It
yet remained for the workers to say : " If you want us
to work in your buildings for your own profit, that does
not mean that when we enter we are no longer our own
masters." Broadly stated, ten or even five years ago,
every management acted on the assumption that, once the
wage-rate was fixed and traditional methods remained
unchanged without consultation — this being regarded as
an act of grace — the wage-earner had to toe the line
and obey orders without question. The power of
dismissal generally rested with the foreman. The
despotism implied in these powers rested upon the
employers' unfettered freedom to pick and choose
between their present and reserved labour. When this
reserved labour was drafted into the Army, new condi-
tions supervened and " works committees " sprang up
like mushrooms. Here before me, as I write, are the

174 NATIONAL GUILDS AND THE STATE

particulars of Works Committees, in twenty-three firms,
details in addition of one national and two district
schemes.^ Some of them are undated, but apparently,
with one or two exceptions, they may be traced to the
disappearance of the unemployed reserve, the consequent
appreciation of the commodity vakie of labour, developed
indeed into a human value, and of course to the urgencies
of the war.

The fact that these committees are in existence marks
an advance in the power and influence of Labour in the
workshop, an acceptance, largely unconscious, of the
concept of labour as a human factor rather than a
commodity. But it is by no means general. Thus,
out of eighteen employers who were questioned as to
the value of works committees, eight were unfavourable.
The reasons given are suggestive : (i.) " Encourages
men to leave work to engage in business which manage-
ment should attend to " ; (ii.) " Power is taken from
management and exercised by the men " ; (iii.) " Simply
looking for trouble " ; (iv.) " Advantage would be taken
to look for trouble " ; (v.) " Any amount of friction
would ensue " ; (vi.) "Afraid grievances would only come
from one side and little endeavour would be made to
assist the management in conduct of works." Nor
was unanimity found amongst the trade unionists in the
same district. The opinions of sixteen were invited. Of
these, seven were employed in establishments having
works committees. Of these, five were favourable and
two unfavourable ; of the remaining nine, four were
favourable and five opposed.

The condition common to all these works committees
is that their function is passive and not active ; control
by the management remains intact. The works com-
mittee helps the management to control; it exercises no
control ; its existence is a compliment to its influence,
an ingenious method of utilising that influence for the

^ JVorks Committees, Report of an Enquiry made by the Ministry of Labour. Price 6d.

THE WORKSHOP 175

smoother working of the staff. That the management
retains full administrative control is implicit in all the
constitutions of these works committees. The Com-
mittee at Hans Renold, Ltd., Manchester, is often cited
as a model of its kind. The directorate says : " From
the point of view of the men, the advantage of the
Committee is that they can go direct to the management,
while before they could only go to the foremen. From
the point of view of the management, the Committee
has, on the whole, conduced to smoother working of
the establishment." Later comes the illuminating
remark : " Both the Welfare Committee and the Shop
Stewards' Committee are used in this establishment
as means for the announcement and explanation of
intended action by the management." Obviously all
this is intelligent and progressive capitalism ; it signifies
no kind of Labour control. Profiteering merely pro-
ceeds in more friendly surroundings. The same
criticism generally applies to the constitutions of other
works committees. All their discussions finally end
before the management ; it is the management that
decides.

Disregarding for the moment the dynamics of the
new Shop Steward movement, looking at it as a static
problem, it would seem that the management takes every
factory function under its charge ; the function of the
works committee is extraneous and bears only indirectly
upon the productive and distributive processes, the
raison d'etre of the factory. Viewed functionally, therefore,
the conclusion is that these committees confer no vital
rights or powers upon Labour : are but an appanage of
management, until Labour claims and exercises active
control over its own work. That involves a marked
restriction of the managerial function ; Labour takes
over its own hne of trenches, under its own command
and control. W^hen that is done, the management will
no longer announce and explain its intended action
through the works committee ; both management and

176 NATIONAL GUILDS AND THE STATE

committee will move in their separate spheres, in
accordance with their defined and agreed functions.

II. The Foreman

The question suggests itself whether these works
committees will become the nuclei around which will
cluster the forces destined to destroy wagery. Who
knows } By rigidly adhering to their present duties, by
smoothing out grievances, by becoming a moderating
influence, they might conceivably grow into a buttress
of the existing system. As things are, they have certainly
earned warm encomiums from some employers. But
difficulties may be thrust upon them, which will push
them into antagonism to the management, on pain of
losing the confidence of their constituents. Not to dig
deeper, there is the question of the foreman. Bad
foremanship is a prolific source of discontent and disorder.
The great majority of minor disputes can be traced to
foremen, who are either inexperienced or blind to modern
developments.

Now the foreman exercises a dual function : he is
responsible both for discipline and technique. He is
expected to possess personal qualities to compass both
ends, qualities that are not necessarily harmonious :
may in fact be repugnant to each other. To induce
a wage-earner to make a special product may mean a
blind eye to breaches of discipline ; to enforce strict
discipline may bring down quality to the unattractive
mediocre. In purely quantitative production he may
perhaps hold his own ; in work demanding craft and
skill he frequently finds discipline the enemy of genius.
His position has become anomalous. It is clear that
the works committee now trenches upon his power of
discipline : has brought the superintendent into direct
touch with the wage-earner. Either half his occupation
goes or the works committee becomes a fifth wheel
on the coach. Constituted as they are, debarred from

THE WORKSHOP 177

direct interference in the manufacturing processes, the
works committee must more and more concern itself
with discipline, supplanting the foreman in this particular
at least.

When we come to consider the problem of collective
contract, probably the most eifective step towards
absolute control, in the sense implied, we shall find
that the foreman's control and technique is again
restricted. If a group of men engage by contract to
make a certain thing, it is evident that they will not
tolerate the surveillance of a foreman. Their contract
will doubtless provide light, heat, power, machinery
and perhaps tools. Beyond that, they become absolutely
their own masters and independent of either foreman
or superintendent. In many industries we have a well-
established system of sub-contract, in which the foreman
already plays an insignificant part. Collective- and sub-
contracting are different in form and purpose ; both
tend to eliminate the foreman as we know him to-day.

As transition proceeds, as discipline and work gravi-
tate towards the heavier Labour body, the foreman will
become less a factor in production and more a symbol
of the capitalist system. As his authority qua foreman
is minimised, he still remains the agent of the employer,
charged to examine and accept the products of the
contracting group. As agent, he would doubtless be
in charge of the materials supplied by the management
in accordance with the contract. He is reduced to the
position of watch-dog, with no enfranchised worker so
poor as to do him reverence. But we need not anticipate.
Mild and docile though they are, the works committees
even now find a problem in the foreman. The report
from which I have quoted notes that there are three
groups of opinion. " Many employers hold that it is
purely a management question. The opposite extreme
to this is the claim made by a considerable section of
trade unionists that the workmen should choose their
own foremen. A position intermediate to these two

N

178 NATIONAL GUILDS AND THE STATE

extremes is taken by a certain number of employers
and by a section of workpeople ; the appointment (they
feel) should be made by the management, but it should
be submitted to the works committee before it becomes
effective. " But what is meant by " submitted " ? The
employers who favour it do so because it affords a suitable
opportunity of explaining their reasons for the appoint-
ment. It is hardly surprising, therefore, that " a con-
siderable body of workpeople . . . think that the works
committee should have the right to veto the choice made
by the management." The underlying assumption is
the persistence of the type of foreman now functioning.
But (as we have already seen and shall see more clearly,
when we examine the possibilities of collective contract,
with the wider sweep and more stringent methods of the
new shop-steward movement) this assumption ignores
the foreman's change of function as inevitable in the
infiltration of industry by economic democracy.

Although these works committees would appear to
be innocuous, not in themselves a threat to capitalism,
we can see that, once started on their way, they may
disturb the balance between Capital and Labour and
finally be compelled to cut a swathe of their own, the
alternative being virtual extinction. This swathe cuts
across the course of the foreman, the employers'
representative in the workshop. That, in its turn, raises
a democratic issue in industry not now likely to be
silenced. The works committee is a hostage sent to
Labour in despair ; it will finally be returned to the
employer, damaged, I fear, in transit. Meantime, its
corollary, foremanship, recalls one of our earliest conten-
tions : " We believe the workman Is the shrewdest
judge of good work and of the competent manager.
Undlstracted by irrelevant political notions, his mind
centred upon the practical affairs of his trade, the
workman may be trusted to elect to higher grades the
best men available." ^ The emergence of the idea of the

^ National Guilds, p. 149. (London : G. Bell & Sons.)

THE WORKSHOP 179

democratic election of foremen is no mere coincidence.
It is a proof, I think, that National Guildsmen cor-
rectly diagnosed the symptoms.

III. Collective Contract

A tyro in social economics would see at a glance
that these workshop committees inaugurate a striking
departure in workshop organisation. Where the real
business is production, it is evident that a workshop
committee concerned only with amenity and discipline
has but a short course to run. It may and does show
some myopic gropings for a new status ; as yet it has
not realised that higher status comes from control of
production and not from responsibility for discipline.
It is, therefore, inevitable that the more alert and
aggressive minds should look beyond discipline to
production, beyond form to substance. They may say,
in effect, " Give us control of production and discipline
will follow. Without control of production, discipline
must be imposed from above, and, therefore, be artificial."
Yet another consideration weighs with these minds.
A committee is, after all, a mechanism. It must be
constructed for a purpose. The object must first be
formulated ; the organisation is next formed to achieve
it. It is clearly of first importance that we should know
what purpose is taking shape before we can appreciate
the value and significance of the workshop committee.
If, for example, the formative elements in the Labour
army were willing to continue wagery indefinitely, were
content to leave the profiteers in control, we need look
no further than to the present orthodox workshop
committee, which would remain an emollient to soothe
industrial irritation. If, however, it became evident that
workshop profiteering (we may, for the moment, dis-
regard the commercial aspect) was doomed, if the
organised workers were aiming at industrial democracy
in the workshop, then it would follow that the structure

i8o NATIONAL GUILDS AND THE STATE

of these committees would be adapted to the end in
view. At the present moment, any movement, however
restricted, aiming at control over production, must be
clothed with significance : must be regarded as an
initiatory effort, as a sure sign that our deduction is
sound. Nor would it be surprising if the movement
came from the Clyde, a district where they are not
afraid of fundamental principles : where, more than else-
where, efficient capitalism is confronted with Labour,
organised and studious.

In a pamphlet issued by the Paisley Trades and
Labour Council ^ comes a call to pass beyond discipline
to the productive processes and an organisation outlined
to realise it. " Only the apathy or disloyalty of the
workers themselves," write Messrs. Gallacher and Paton,
" can prevent the works committees having in a very
short time the experience and the authority to enable
them to undertake in one large contract, or in two or
three contracts at most, the entire business of produc-
tion throughout the establishment. Granted an alliance
with the organised office-workers — a development which
is assured so soon as the Shop Committees are worthy
of confidence and influential enough to give adequate
protection — these contracts might include the work of
design and the purchase of raw material, as well as
the operations of manufacture and construction. The
contract price or wages — for it is still wages — will be
remitted by the fiim to the Works Committee in a lump
sum, and distributed to the workers by their own repre-
sentatives or officials, and by whatever system or scale
of remuneration they may choose to adopt. If, as is
likely, a great Industrial Union has by this time taken
the place of the sectional unions, these financial intro-
missions may be carried out by its District Executive
instead of by the Works Committee. A specially
enlightened union of this sort would no doubt elect

^ Toivards Industrial Democracy, a Memorandum on Workshop Control. By
W. Gallacher and J. Paton.

THE WORKSHOP i8i

to pool the earnings of its members and pay to each
a regular salary, weekly, monthly or quarterly, exacting,
of course, from the recipient a fixed minimum record of
work for the period."

The writers' conception of works organisation must
be coloured by the end in view, and we may, therefore,
expect from them proposals that go beyond discipline
and amenity. They suggest :

1. A Works Committee, elected by and from all the
trade unionists, skilled and unskilled, in the various
departments, one representative to every fifty workers.

2. Departmental Committees, to work under the
direction of the Workshop Committee. Amongst other
duties, such as ensuring trade union standards and
agreements, negotiating with the departmental manage-
ment, recording changes in shop customs, the root of
the matter is found in its proposed function as the sole
medium of contract between the firm and the workers,
and to exercise full bargaining powers on behalf of the
men and women in the department in fixing time
allowance where the premium bonus operates, and
rates where piece-work obtains. Individual bargaining
disappears ; collective contract supplants it.

From the department as the centre, Messrs. Gallacher
and Paton argue outwards. The Department Committee
reports weekly to the Works Committee, which naturally
preserves a balance as between the several departments,
and deals with the firm precisely as the Departmental
Committee deals with the departmental management.
The Works Committee, in its turn, is to report to the
Allied Trades Committee, which is to co-ordinate methods
generally in its own district, and be the sole intermediary
between the Workshop Committees, and all and any
joint bodies of employers, State Committees, Govern-
ment Departments. This Allied Trades Committee, in
short, must not only co-ordinate methods, but shape
policy.

It will be observed that the Allied Trades Committee

1 82 NATIONAL GUILDS AND THE STATE

is really the pendant of existing trade union organisation.
With the formation of Industrial Unions, its function
would be absorbed by the larger and stronger body.

The workshop organisation here figured by these
two Labour leaders is evidently, both in form and
purpose, a very different thing from the official workshop
committees, described in Section i, about which some
employers and social writers have grown lyrical. The
reason is simple : discipline is transcended in the real
economic function : is implicit in that function : springs
naturally out of fruitful soil, and need no longer be
artificially imposed. As the greater includes the less,
so the principle of collective contract carries discipline
and amenity in its stride.

As its name implies, collective contract is frankly the
halfway stage between existing workshop conditions and
Guild organisation. It is obviously a contract between
employers and employees to consolidate wages into one
or two contracts instead of five or ten thousand contracts,
as is the case to-day. It remains the wage system of
payment, inasmuch as labour is still valued as a com-
modity, and, as such, goes into the cost of the finished
product : remains a commodity of fluctuating value,
subject to changing market conditions, instead of a
human value, unchangeable, in the financial sense,
through the vicissitudes of local, national or international
barter. Messrs. Gallacher and Paton recognise this :
" Now, it is true, that even when we have got so far,
we shall not yet have destroyed the wage system. But
we shall have undermined it. Capitalism will still
flourish, but for the first time in its sordid history it
will be in real jeopardy. With such a grip on the
industrial machine as we have postulated, and backed
by the resources of a great Industrial Union, or it might
even be a Federation of Industrial Unions, the Com-
mittees could soon force up contract prices to a point
that would approximate to the full exchange value of
the product, and put the profiteer out of business." On

THE WORKSHOP 183

this last point, the authors are on difficult if not dis-
putable ground. Exchange value is what the entrepreneur
can make it, and so long as he has contract prices to
work on, he can indefinitely plunder the consumer. In
the ultimate, Guild organisation, or whatever approxi-
mates closest to it, must control distribution, which is a
process of production. Any recognition of the commercial
control of distribution would carry in its train disastrous
results. But the collective contract here adumbrated
makes no pretence to being in itself an economic system ;
it is what it claims to be — a development of the wage
system, a stage in workshop control, incidentally of
discipline, mainly of production.

Whilst the orthodox workshop committees are static
in conception, based on "the permanent hypothesis," ^
the principle of collective contract possesses within itself
the magic of its own metamorphosis. It breaks into the
sacred ark of the capitalist covenant, setting in motion
forces hitherto deemed to be strictly within the control
of the employer. Take, for example, the proposal that
an Industrial Union should receive the total labour
earnings and return them to the workers in weekly,
monthly, or quarterly payments. At the first blush that
looks like a simple cash transaction. But it might and
ought to mean much more. How do the employers
obtain the credits necessary to them in the conduct of
their business ? They obtain credit, either in the form
of new capital or bank accommodation, strictly upon the
understanding that they can control the demand and
supply of the labour commodity. It is only by main-
taining this control that they can pay interest and repay
loans. There is literally no other way. But the banks,
in their turn, co-ordinate credits mainly on estimates of
future production and partly by controlling the gold
reserves — gold being the basis of the banking system.
Now suppose that collective contract established itself

^ I first applied this term to the wage-system in Guild Principles in War and Peace,
(G. Bell & Sons.)

1 84 NATIONAL GUILDS AND THE STATE

throughout the industrial system. It would represent
an annual payment in gold of about ;^ 1,000,000,000 per
annum. This does not inconvenience the Banks, because
the gold values quickly trickle back into their coffers,
through the accounts of retailers and wholesalers. If
the Industrial Unions kept an ordinary bank account
and paid cheques in the usual way, it would remain a
cash transaction, and nothing more. But is it likely
that an organisation capable, not only of influencing
credits but of accumulating gold, would be content to
let such stupendous advantages remain with the capitalist
organisation .'' An Industrial Union that knew its
business would — indeed, must — constitute itself a Bank,
and pay its members by honouring their cheques. I
have elsewhere written : " The object of measuring
the wage-slave's labour by gold is that the dividends
paid out of labour shall be paid in gold. The valuation
of labour and the products of labour by a gold standard
are obviously the perquisites of the present banking
system, and are a fruitful cause of tyranny. The system
puts a heavy premium upon gold, and a tyrannous
discount upon labour." ^ No change in the present
system of currency is possible until Labour consciously
controls the productive processes. If Labour travelled
as far as the point indicated by Messrs. Gallacher and
Paton, it is at least possible that it would utilise the co-
ordinated credit that automatically falls under its control
in a way very disconcerting to currency monopolists.

Nor must we omit to note carefully that the authors
take into their purview the purchase of raw material.
There is no reason why they should leave this to the
employers, because the employers obtain credit for the
raw material upon their guaranteed control of the
labour commodity, a control that, by hypothesis, has
passed to the Industrial Union. Thus, the Industrial
Union Bank, either on the balance of savings left in Its
care, or by pledging the continued labour credits of its

' National Guilds, p. 182, " The Finance of the Guilds."

THE WORKSHOP 185

members, all of them actual producers, could itself pur-
chase the raw material, and cut loose from capitalist
control in this respect as in the simpler process of labour
supply and organisation.

Although Messrs. Gallacher and Paton are, I think,
intent upon a more modest programme, it would be
more prudent if they faced the inevitable results of their
proposal. They would seize two functions hitherto
assigned to the capitalist — the control of labour and
the purchase of raw material. It is essential that they
should accept the implications of their principle. These
implications, if grasped by the workers, accentuate the
motive of collective contract, rendering its attainment
vastly more attractive.

IV. The New Shop-Steward Movement

A book might be written upon the historic results of
an inadequate vocabulary and the confusion arising
from words and terms that cover a variety of mean-
ings, often diverse. Thus, since the war began, we
have an old and a new conception of the term " shop-
steward " and its constant use in two different senses,
at the same time, in the same industry, and often in
the same workshop. The future student of industrial
problems, as they present themselves to-day, will be
liable to stumble into false conclusions, unless he realises
that there are shop-stewards and shop-stewards. There
have been half-hearted attempts to distinguish the
earlier type from the later by describing the new develop-
ment as the " rank and file " movement. On the
whole, however, we must take it that a new meaning is
gradually being read into the term " shop-steward."
There has been, in fact, a struggle for possession of
the name between the old orthodox trade-union use of
it and the new movement, which would endow it with
added powers and a fresh meaning.

In practically all the works committees to which I

1 86 NATIONAL GUILDS AND THE STATE

have alluded, the shop-stewards and representatives
must be endorsed by their respective trade-union
branches. This continues the trade -union tradition
that the branch is the centre of activity. The old-time
shop-steward was, and remains, the representative in
the workshop of the trade-union branch. He still
reports to the branch, still watches the interests of his
union in the shop, satisfies himself that the men in
the shop are in full membership, guards against innova-
tions that threaten trade-union conditions and standards,
and, generally stated, is the connecting link between
the bench and the bi-anch. But it is not he of whom
we have heard so much during recent years ; he is
not the bogey of the Press and bureaucracy : on the
contrary, he is universally recognised as eminently
respectable, useful, and harmless. It is the other
fellow of the same name who has so disturbed the even
ten our of our way, who has wantonly perturbed the
scribes of Fleet Street and the amateur politicians of
Clubland. Our knowledge of workshop organisation
will be sketchy in the extreme unless we understand
the genesis, methods, and objects of the new shop-
steward movement. For not only does the new shop-
steward stand for a new scheme of industrial organisa-
tion ; he is the stormy petrel of approaching industrial
unrest. To seek a more appropriate metaphor, he is
sitting on the capitalist safety-valve. The question is
whether he or the capitalist will be blown up in the
ensuing explosion.

It is assumed by most writers and critics that the
new shop-steward movement is a product of the war.
He has, no doubt, been hatched out during the war
and under the pressure of the war, but it is not diffi-
cult to prove, granted the continuity of ideas, that he
derives from an earlier period. He is, in fact, in the
apostolic succession of Labour discontent, which first
found voice in the early 'nineties. Partly consciously,
mainly unconsciously, he is rooted in the earlier his-

THE WORKSHOP 187

tory of Labour organisation. In his own person he
represents the reaction from the abortive political effort
that began in 1892. Had it been possible to acquire
political power without prior economic power — the basic
idea of political Labourism — there would have been no
reaction ; the old-established shop-steward would have
remained in peaceful possession of his title ; the economic
revolution would have been born in twilight sleep.

Not the least of the disabilities of the Labour move-
ment is that, being young itself, it ignores historic
progression, and concerns itself only with the concrete
facts of the day. Nevertheless, it has its history, not
only of recent years, but from early formative periods,
from the birth and growth of British liberties. The
history of the English yeoman is still told in stray con-
tributions to the agricultural problem ; the story of the
mediaeval Guilds has still life and guidance in it. But,
in the main, it is an account of passive acquiescence
in greater movements and more powerful interests,
none the less instructive on that account. From the
late 'eighties, and more particularly the early 'nineties,
the passive gradually changes into a more active aspect ;
we find ourselves in touch with a living and expanding
historic motive. There is a sense in which history
repeats itself ; yet another, in which history lives by
carefully avoiding the repetition of the past, when by-
gones must at all costs remain bygones. However
we regard it, we certainly run grave risks in disregarding
the lessons of history ; we invite disorder by considering
each new event and development as historically contained
in itself. The new shop-steward movement illustrates
the value of relating the new to the earlier conditions
which gave it life. How little shall we understand it,
with its thousand offshoots, if we treat it as something
sprung out of the void without pride of ancestry or hope
of posterity 1

My reason for relating the new shop-steward move-
ment to 1892 is that it was in that year that a new policy

1 88 NATIONAL GUILDS AND THE STATE

was launched ; a new school of thought began to argue
that the strike as a weapon was futile ; that emancipa-
tion must come by capturing the State through Parlia-
ment ; that, in consequence, Labour must enter the
political field to realise a vague and indefinite State
Socialism. It is curious and suggestive to note now that,
in those days, it was the old-fashioned trade-unionists
who opposed the new ideas, pinning their faith to old
trade-union methods and arguing for stronger industrial
action. That was not their real reason ; they were
committed, body and bones, to Liberalism. It is quite
possible that they would have succeeded in keeping
trade-unionism formally detached from politics, at least
for another decade or two, had not the Taif Vale judg-
ment cut the ground from under their feet, and stampeded
Labour, willy-nilly, into independent political action.
The result was a serious slackening of industrial organisa-
tion and aggression. Labour put all its nervous energy
into politics ; it was not rich enough in intellectual
strength and man-power to pursue concurrently a political
and an industrial struggle. I am never tired of repeating
that the test of the efficacy of political action came in
the period 1 906-1 910. Labour was safely entrenched
in Parliament ; on the whole, it was enthusiastically
supported by the trade-unions and constituents gener-
ally ; to a degree beyond its numerical strength, it
had both the ear and the assent of Parliament ; it was
a period of unexampled prosperity ; yet real wages
steadily fell, and Capital gained power at the expense
of Labour. As these facts grew patent, an industrial
reaction set in. Beginning about 19 10, it gradually
grew in strength, culminating in the new shop-steward
movement, which came to a head after the war had
started.

There is a consensus of opinion that the industrial
unrest, in part a protest against futile politics, in part
against obsolete trade -union methods and organisa-
tion, wholly against capitalist control of industry, had

THE WORKSHOP 189

assumed serious proportions before 19 14. The Com-
missioners appointed to inquire into industrial unrest
in Wales, in a Report of permanent value,i tell us that
" a considerable amount of unrest existed in South
Wales for some years previous to the war, and the un-
satisfactory relation existing between employers and
men frequently manifested itself in disputes, many of
which attained serious proportions." Amongst the
permanent causes of unrest, the Commissioners note
that " while there has been an advance in money wages
during recent years, more particularly since 1895, there
has been a decrease of real wages, and concurrently
with this there has been a steady movement for the
raising of the standard of living, which naturally necessi-
tates an increase in real wages. Employers have, of
course, resisted the demands of the workmen for [real]
wage increases, for the reason that the concession of such
demands tended to reduce the margin of profits or were
not otherwise justified." I think the Commissioners
are anxious that we should appreciate the mental atmo-
sphere in which this discontent was bred. They are
at some pains to make us understand. Thus, " the
younger generation, fed upon the writings of the Fabian
Society, the Independent Labour Party, and the works
of Continental and American writers, has tended more
and more to formulate a theory of reform which is almost
entirely opposed to that of the old." Later on we read :
" Between these two movements — the one of direct
political action, the other of industrial unionism in its
various aspects — there is at present a distinct cleavage.
But each is profoundly affecting the other. . . . These
classes, then, together with the transformation of industry
into the combine on the one hand and the fool-proof
machine on the other, have had their part in the revolu-
tion that has taken place in the minds of the workers.

^ Cd. 8668. Commission of Enquiry into Industrial Unrest^ Report of the Commia-
sioners for Wales, including Monmouthshire. (H.M. Stationery Office. Price 6d.
net.) The clarity of the tindings in this report must not be minimised by the compara-
tive political obscurity of its writers. It is a State paper of the first importance.

I90 NATIONAL GUILDS AND THE STATE

Whilst, in the old days, the road to reform appeared
to lie in the direction merely of the consolidating and
care of local interests, of late the workers have both
widened and narrowed their outlook. Improvement
of status, rises in wages, have all proved ineffective
against the more obvious pressure of capitalist economy
and the patent gambling in the necessities of life. This
has been taken advantage of by teachers and leaders,
and out of it has developed a form of class-consciousness
increasingly powerful and deliberate of purpose."

More germane to our present inquiry comes a new
and ominous note : " On the other hand, the domi-
nation of the trade unions by their officials, whose
expert knowledge and intimate experience render them
essential to the union and give them an almost un-
assailable position, has engendered a spirit of unrest
and suspicion which found one outlet in the recent
demand in the S.W.M.F. for a ' lay executive,' and
for the relegation of the official to the position of adviser
shorn of executive power." The Commissioners who
inquired into conditions in Yorkshire and the East
Midlands found an " apparently universal distrust alike
of the Trade-Union Executive and of the Government
Departments who act with and through them." " The
' Rank-and-File ' organisation threatens to become, in
our opinion, a most serious menace to the authority
and entire work of the A.S.E. and other skilled workers'
unions." But the trouble is clearly of old standing,
for whilst war conditions have doubtless accentuated
the distrust of the union official elements, " a feeling
had evidently existed prior to the war that some closer
touch and a greater measure of local control was needed
than is possible under the existing trade-union rules that
impose Central Executive control." The Commissioners
for London and South-Eastern Area remark that " this
loss of confidence in the Government is unfortunately
associated with a diminished reliance on the power and
prestige of the trade unions and the impairment of the

THE WORKSHOP 191

authority and influence of these executive bodies. . . .
The workpeople have gained the impression that if
they wish for any improvement in their conditions they
must take the matter into their own hands, and bring
pressure to bear upon the Government. . . . There
is a danger that unless some satisfactory arrangement
be made for representation of the workpeople in shop
negotiations a large section of shop-stewards proper
will make common cause with the revolutionary group."
The Scottish Commissioners approach this particular
problem from a different angle : " The trade organisa-
tions also are probably not altogether to be absolved
from contributing to creating labour conditions which
lead to labour unrest. . . . Probably there are too many
unions catering for the same class of craftsmen, or general
workers, and a reduction in the number of unions might
result in more effective organisations and expedite the
settlement of trade disputes. Much time would be
saved (and delay always causes unrest) if employers
could deal with one union, representing workmen of
one class. . . . Competition among unions is probably
also apt to create differences between officials and
members. ... It is suggested that the trade -union
representatives should give serious consideration to
the possibility of expediting the making of agreements
and promoting more prompt settlement of differences
by improved methods of industrial organisation." The
Scottish Commissioners state in the forefront of their
Report that " Labour unrest is not a new thing, and not
by any means a creation of the war. Its causes have
deep roots, and its remedy covers a wide field of operation."
Lastly, I quote from the Report of the Commissioners
for the West Midlands Area: " Unrest Is no new
feature. It existed before the war and will exist after.
Nor is it a sign of unhealthy conditions, but, on the con-
trary, of a vigorous and growing community. Indeed,
the war has not essentially changed its character. . . .
The fundamental causes of unrest are the same In war

192 NATIONAL GUILDS AND THE STATE

as in peace — a struggle by the workers to secure a
larger share of the profits of industry and a greater
control over the conditions under which they work and
live."

From the foregoing come certain presumptions and
conclusions directly relevant to my subject :

(i.) That industrial unrest, even as we know it
to-day, existed prior to the war, although since given a
new bias and accentuated.

(ii.) That, owing to education and training, the pro-
letarian demands, both before and since the war, had
gone beyond the compliance, or power to comply, of
the capitalist economy.

(iii.) That existing trade -union organisation has
proved unequal to the strain. In two directions at
least :

(a) Central direction had lost touch with or run
counter to local needs and sentiments, and was under
suspicion of acting from political rather than industrial
motives.

{b) Out of the multiplicity of unions we find friction,
ineffectiveness, delays, and confusions.

(iv.) The new shop-steward movement is the inevit-
able expression of the reaction against political Labour-
ism, prior to the war •, the assertion of local rights
and necessities as against centralised direction ; the
inception of trade-union amalgamation, now imperative,
if trade unionism is to fulfil its rightful destiny in the
industrial future.

This last conclusion calls for more detailed analysis.

V. War Conditions and the New Shop-Steward

The evidence is, I think, conclusive that the new
shop-steward movement is rooted in the normal peace
conditions, that it is an inevitable development of capital-
ism. That is to say, had there been no war, the new
shop-steward would, sooner or later, have first jostled

THE WORKSHOP 193

and finally supplanted his conventional prototype. But
it does not follow that events would have succeeded
events precisely as they have done. Such is the fluidity
of human organisation that, whilst its main direction
may be foretold with reasonable certainty, its way of
surmounting unforeseen obstacles must be determined
by immediate occasions. Inasmuch, therefore, as we
are finally concerned with normal conditions, it may
prove useful to try to disentangle war effects from that
normal flow of hap and change from which only can
we evolve a permanent principle of social and economic
growth.

This war of twenty nations was no police affair, like a
frontier rising or a tribal revolt. It was the merciless
test of our physical, mental, moral and financial strength.
Everything we possessed must, if need be, be thrown
into the scale. In addition, therefore, to the individual
nerve-strain, the daily wrack of personal anxiety, the
State must step into every national activity, guiding
when it did not actually control, cajoling where it
did not drive, exhorting when it did not threaten.
Apart from the personal shocks and invitations inci-
dental to war, the outstanding fact was the feverish inter-
vention in industry of the State. From 19 14 onwards.
Labour had accordingly to deal with a triangular situa-
tion, at one angle the employer, at the other the State.
Had the interests of State and employer been identical.
Labour would have found it a simpler task. I think
it probable that, at the outset, the main idea of the
State, of course through its governmental organisation,
was to act generally through the management and
agency of the employers. A month or two brought
a rude awakening. What the Government wanted
was productive labour and speedy output. To succeed,
it must keep in direct touch with Labour : build up an
official organisation to deal with Labour : provide for
trade disputes by arbitration or negotiation. Gradually,
by Time's winnowing process, it was discovered how

o

194 NATIONAL GUILDS AND THE STATE

supremely necessary Labour was, whilst the Capitalist
lagged superfluous, a drag and a nuisance. Assum-
ing the loyalty of the technical staff, the Government
and Labour combined could have waged war more
effectively than the present system of capitalism mixed
with State Socialism, sprinkled with paternalism, dis-
tracted by a purblind militarism, which would itself
have fallen from sheer rottenness had it not been
reinforced by abler administrative brains.

I think that a large proportion of the industrial
disturbances that occurred during the war can be
traced to the painfully slow adaptation of Government
policy and methods to the new industrial conditions.
Official hesitation, bringing in its train frequent changes
of policy and, sequentially, broken promises, has un-
doubtedly been a fruitful source of strikes — if not of
actual strikes, of irritation and smouldering discontent.
It must be remembered that this adaptation did not
come on terms of equality between the officials and
Labour. The officials started armed with arbitrary
powers in the application of which they were necessarily
inexperienced. Let me recall the powers conferred
upon them by the Munitions of War Acts. In the
earlier stages a workman might not leave his employ-
ment without a permit. That had to be abrogated ;
but he must find work within a fortnight or go into
the Army. The strike was declared illegal. Collective
bargaining (not to be confused with collective contract)
gave way to State settlement. Workshop discipline
could be enforced in a criminal court. Trade Union
rights were swept away ; trade customs laboriously
acquired were abolished ; dilution became a dominant
fact of the situation. The Munitions Tribunal settled
questions previously adjusted by the Management
and the Trade Union Secretary. The powers of the
Munitions Tribunal, particularly of the Chairman,
went beyond all reason. The workers' objections need
only be stated to be appreciated :

THE WORKSHOP 195

1. The breaking of rules, often trivial, became a
crime.

2. The Chairman was all-powerful and the assessors
powerless.

3. The Chairman belonged to the possessing classes.

4. He was usually a lawyer.

5. Bias was shown in the composition of the men's
panel.

6. Fines were excessive and especially harsh on
women.

7. No proceedings were taken against employers.

8. The meetings were held in a police court and in
a criminal atmosphere.

9. So objectionable were the surroundings that, rather
than face them, workers preferred to submit to injustice.

10. Attendance involved loss of time and wages.

It is now evident that this was almost entirely panic
legislation, causing more disturbance and unrest than
it obviated. The Commissioners who inquired into
industrial unrest seem to be agreed that the men had
genuine grievances created by this panic legislation.
" A cause for unrest, which seems to be universal, is
dissatisfaction with the machinery for the prompt settle-
ment of differences " write the Scottish Commissioners.
" Another cause of complaint giving rise to unrest is
that, when a formal award is issued — more especially
in the case of awards by single arbiters — further delay
occurs in having it made operative, because of the
brevity with which it is expressed, and sometimes the
want of clearness in regard to whom exactly it covers."
" The fact is indisputable that delay in settling differences
does exist at present, and the occurrence of such delay
is a grave cause of industrial unrest." " We have been
frankly informed by many responsible representative men
that the feeling is growing in the minds of workmen
that the Munitions Acts do not, in fact, provide the
quid pro quo for the strike prohibition which the words
of the Act were designed to afford the worker, and that

196 NATIONAL GUILDS AND THE STATE

workmen and their representatives find by experience
that prompt consideration of their grievances is only
given when they come out, or threaten to come out,
on strike." The London and South Eastern Commis-
sioners say : " These Tribunals are considered by
the men peculiarly obnoxious. They find it difficult to
distinguish them from a police court and they resent
the stigma which appears to attach to them. From
information placed before the Commission there would
seem to be some justification for the complaint that
personal feeling has been the cause of some of the
prosecutions, many of which are brought on frivolous
or insufficient grounds." The same story runs through
all these reports, told with deadly official restraint.

One other aspect must not be ignored. There
is not much doubt that many employers, relying on
the men's natural reluctance to strike, shamelessly
exploited the situation. One quotation must suffice.
The Welsh Commissioners in enumerating the tem-
porary causes of discontent place first : " The sus-
picion that a portion of the community is exploiting
the national crisis for profit. This suspicion, rightly
or wrongly, was one of the factors that brought about
the South Wales strike of 19 15. The allegations of
profiteering were applied at first to employers in various
productive industries, especially coal-mining and shipping.
Latterly, the indignation has been focussed on the agencies
engaged in the production and distribution of food
commodities. . . . The workers are prepared to bear
their portion of the war burden, but they decline to do
so whilst, as they believe, a favoured few are exploiting
the national necessity." It may be well to set against
the anathemas, hurled at the South Wales miners in
1 9 1 5, the measured judgment of these Commissioners :
" With reference to the miners' strike after the expira-
tion of the old Conciliation Board Agreement in 19 15,
we are assured, and have every reason to believe it
to be the fact, that, far from allowing considerations

THE WORKSHOP 197

of their ultimate aim to lead them to use the national
crisis as a means of extracting better terms from the
employers, the men were driven to strike by the
belief on their part that the owners were exploiting the
patriotism of the miners, believing it would inevitably
prevent them from pressing home their claim by actually
striking. It was this suspected exploitation of their
patriotism for the gain of others, and not any lack of
patriotism or of failure to appreciate the national diffi-
culties that caused them to strike."

We can now see, in perspective and with requisite
detail, how abnormal were the conditions created by
the war in 19 14. Nor can we fail to note in what
adverse circumstances organised Labour had to struggle.
But the bald statement of the legal disabilities imposed
conveys no adequate idea of Labour's impotence in those
critical days. Political Labour not only joined the
Government, but gave with open hands something
valuable for which it was morally bound to bargain
hard and continuously. In any event, the time was
unpropitious. The war came at the moment when
centralisation governed trade -union methods,- when
local opinion was almost dumb. It came, too, when
the political and industrial leaders were practically
interchangeable, were a close corporation, playing into
each others' hands, monopolists in control both of
political and industrial policy. In the circumstances,
when Mr. Henderson gave the lead for undeviating,
unconditional support of the Government, the trade-
union officials threw down their defences and let official-
dom run rough-shod over them. A factor not sufficiently
appreciated is that trade-union officials joined the public
service in droves, thus seriously depleting the Labour
personnel when it needed strengthening. This ill-
considered policy left the trade unions in each locality
at the mercy of the official elements, not strong enough
even to rectify the most palpable blunders of their new
rulers. The Clyde adjudication was a blunder both

198 NATIONAL GUILDS AND THE STATE

in equity and form ; the deportation of the Clyde Labour
leaders, substantially in the right of it, was another
blunder. The studied disregard of local rights and
customs was another blunder. The Munitions Tribunal
was yet another blunder. Every week brought its
capital blunder, with Labour by now too weak and
disorganised to protest in any effective manner. An
ever-widening breach between the local men and their
officials portended trouble. The Labour leaders, im-
mersed in affairs at the centre, either did not realise it
or were lacking in statesmanship to bridge it.

Even the most hide-bound bureaucrat, wise after
the event, will now agree that nine-tenths of his re-
strictive legislation was gratuitous. As the months
lengthened into years, it became abundantly evident
that, in the excitement, we missed our way. The real
line to pursue was to develop the local spirit, to en-
courage local autonomy, to decentralise power, to
recognise the efficacy of that democracy for which we
had presumably gone to war. In various ways the
locality is regaining its old powers, notably in food
production and distribution ; in agriculture the local
committee is now asserting itself. The appointment
of local iron and steel committees to release men to the
Army marked a change of policy of some significance.

This reversion to the locality is precisely what has
happened in industry. The local men found that they
must submit to everything or fight their own battles.
Being what they are, they naturally chose to take up
the weapons incontinently thrown down by the trade-
union officials. But they bettered the instruction. If
the central officials were too busy to take care of their
local clients, why not bring all the local workers of
every union into some kind of united action .'' It was
evident that the amalgamation, so sorely needed, would
never come from above. Then it must come from
below. The war had finally killed the old demarcation
quarrels. Very good. With the abolition of demarca-

THE WORKSHOP 199

tion went the necessity for the distinctively craft unions.
Industrial unionism began to assume definite shape.
In this wise the two principles of locality and union
amalgamation have been fused in the furnace of war.
The new shop-steward unites in his person both those
principles.

VI. The Industrial Unit and the New
Shop-Steward

The connection, at the first glance not discernible,
between locality and amalgamation, becomes evident
when we realise that the workshop is local and stands
most urgently in need of amalgamated effort. It is in
the workshop where the employers enforce their will ;
it is the workshop that suffers first and most acutely from
disunity or unco-ordinated trade-union action. It is
the worker in the workshop who pays in loss, suffering,
and victimisation ; the central official is put to the
trouble of signing cheques for strike-pay or the personal
discomfort of conducting the strike (presuming it gains
executive sanction) — work comparable to rough-and-
ready electioneering — his interest in the strike being
mainly professional, like an insurance agent paying fire
or life liabilities. That is not to say, however, that the
central union, with its officials, does not fulfil a neces-
sary and valuable function. All to the contrary ; in
their search for a more effective local unit of organisa-
tion, the shop-stewards, so far as I know, do not dream
of weakening the national union. It is indeed part of
their case that the national union gains immeasurably
by concentrating local enthusiasm and local industrial
power, where those two elements are always to be found
— ^in the workshop.

It will not be denied, I imagine, that the contact
between the executive and the local organisation has
recently developed a tendency to short-circuit. The
defects of centralisation have become exposed. They

200 NATIONAL GUILDS AND THE STATE

were inherent in trade unionism prior to the war ; the
strain of war would naturally reveal them. But, since
it is the workshop that first suffers from the defective
structure, since it is the workshop that has most to gain
by co-ordinated local effort, it was inevitable that the
movement for amalgamation should originate in the
workshop ; that the conditions essential to amalgamation,
namely, local industrial unity, should be anticipated by
the local leaders in the workshop. Broadly stated, these
local leaders are the new shop-stewards.

The ever-changing relations between central direction
and local loyalty constitute a problem always present in
practical democracy. The weakness of local sentiment
is that it tends to particularism. I once knew a town
councillor who thought and spoke of nothing save the
drainage scheme to the committee of which the worthy
city fathers had elected him. He was ubiquitous at
conferences, never failing to impress his hearers with
the vast importance of drainage in general and his own
local scheme in particular. In like manner, a local
strike is apt to colour the imagination of its participants
— a strike viewed by the executive as a mere affair of
outposts. Nevertheless, fundamental truth is generally
found at the bottom of local movements ; the local
impulse, informed by truth, however crude, gradually
spreads, until the executive recognises its justice and
vitality and accepts the new situation. The weakness
of centralised authority is that, in the pursuit of policy,
it is apt to become detached from fundamental truth.
Policy may or may not be the negation of truth ; it is
generally either the evasion of truth or its minimisation.
The working principle of soi-disant practical politics is
that you secure the maximum effort with the minimum
truth. The greater the truth, the greater the opposi-
tion. It is, of course, a delusion as old as Moses :
" Take heed to yourselves that your heart be not deceived,
and yet turn aside and serve other gods and worship
them." The weighing of the attractions of " other

THE WORKSHOP 201

gods " most frequently brings the centre into collision
with the more direct, less subtle local sentiment.
Certainly there always comes a time when local men,
driven desperate, on the one side by harsh conditions,
on the other by executive policy, take the law into
their own hands, and, in the name of democracy, pro-
ceed to extremes. Granting that democracy postulates
discipline, we cannot deny the democratic impulse at
the root of the local movement for a more elastic ex-
pression of local life and work. This issue came to a
head on the Clyde in 19 15. The local men decided on
independent action despite the advice of the A.S.E.
Executive. It is interesting to note how it struck an
analytic mind. Mr. J. H. Jones, Lecturer on Social
Economics in Glasgow University, watching the strike
at close quarters, wrote :

" It is very important to notice the issues, for we are
watching to-day the birth-pangs of a new unionism, and
this dispute shows quite clearly the divergence between
the methods of the past and the proposals for the future,
which in many quarters are being vigorously urged.
The adherent to the unionism still current would argue
thus : The Withdrawal of Labour Committee repre-
sents the negation of collective bargaining, since
collective bargaining implies an agreement covering a
period of time, and such an agreement implies in turn
an enduring organisation of labour. A party to a con-
tract must be either a continuous personality or a legal
inheritor of its rights and duties. Thus, the Labour
Withdrawal Committee cannot be reconciled with trade
unionism : it stands for anarchism in the industrial
world, and no logic can make it consistent with constitu-
tionalism, for (i.) its aim is the destruction of government
machinery ; (ii.) its economic success depends upon
the prior achievement of that destruction ; (iii.) that
success if achieved makes it a governing body, open
to the same kind of attack and destruction as marked
its own rise to power. This is an infinite process whose

202 NATIONAL GUILDS AND THE STATE

every link is a breach of continuity, a mode of perpetual
succession in which each successor wipes out the obliga-
tions attaching to its patrimony.

" On the other hand, his opponent would urge, there
is nothing catastrophic in the new procedure. Existing
unionism displays a permanent officialdom out of touch
with its constituents and paymasters, and our object is
to maintain close connection between it and them.
The only way for us to do this is to leave undefined the
period for which they are elected to serve. An official
closely in touch with and loyal to his electorate might
conceivably hold office ad vitam, but we wish to be free
to use ad culpam against him without notice given. All
that happens is therefore a resumption by the body
politic of a temporarily delegated sovereignty — no
insurgent group can succeed unless its views embody
some sort of ' general will.' There is no ' negation of
collective bargaining ' in our policy as a whole, for we
aim also at the democratic control of production, and,
like Britain herself, we shall never have a revolution
because revolutions will be periodic and normal." '^

Mr. Jones, I think, predicates a changing sovereignty
in a continuing body of organisation. In the light of
subsequent events he would probably recognise a
change, not only of the governing authority, but of
the organisation itself. The logic, conscious or uncon-
scious, of the new shop-steward movement, not only
involves action ad culpam against elected leaders, but
also the strengthening of local authority, by the con-
solidation into one body of all the groups in the work-
shop, groups at present affiliated to several different
unions and therefore not at present responsive to quick
and united action. But when we reach this stage we
are faced with a definite change in the structure of
trade unionism. This change, as we shall see, will be
marked by the transfer of authority from the trade-
union " branch " to the workshop. The new shop

^ FoUtical Quarterly, May 19 15.

THE WORKSHOP 203

steward reigns in the workshop ; he is a nonentity in
the branch. In the workshop he is chosen by the
workers, irrespective of their particular craft, by the
skilled and unskilled alike. It is the old shop-steward
who still reports to the branch.

Thus, the new shop-steward, although invariably
himself a trade unionist, does not act as such, but as
the elected representative of his section of the shop,
chosen by employees of every trade and union. The
effects of this, now increasingly realised, are (i.) to
constitute the shop as the unit of activity, thereby
superseding the trade-union branch ; (ii.) to organise
an effective local counterpoise to centralisation ; (iii.)
to expedite and finally compel trade-union amalgama-
tion as the first step to the Industrial Union ; (iv.) to
compass industrial solidarity by bringing the worker
of every grade into organic cohesion. But let the new
shop-steward speak for himself. Mr. J. T. Murphy,
one of the ablest of the new men, writes :

" The only way the mutual interests of the wage-
earners can be secured, therefore, is by united effort
on the part of all interdependent workers, whether men
or women. Many have been the attempts in the past
to bring about this result. Federal schemes have been
tried and amalgamation schemes advocated. Charac-
teristic of them all, however, is the fact that always
they have sought for a fusion of officialdom as a means
to the fusion of the rank and file. We propose to
reverse this procedure. Already we have shown how
we are driven back to the workshops. With the work-
shops, then, as the new units of organisation, we shall
now show how, starting with these, we can erect the
structure of the Great Industrial Union, invigorate the
Labour movement with the real democratic spirit, and
in the process lose none of the real values won in the
historic struggle of the trade-union movement." ^

* The Workers' Committee : An Outline of its Principles and Structure, by J. T.
Murphy. (The Sheffield Workers' Committee. Price 2d.)

204 NATIONAL GUILDS AND THE STATE

Plainly, a movement from below instead of from
above. In the circumstances, this is not surprising ;
there seems no motive or impulse from above ; from
below, the urge for united action has rendered amal-
gamation inevitable.

We mvist not, however, cavalierly dismiss the trade-
union branch as obsolete because it has proved inade-
quate to certain industrial developments. There is the
difficult question of finance, properly involving central
control, in which the branch is vitally concerned. There
is the problem of craft training and protection, which
is by no means solved by the formation of an industrial
union. It Is possible, too, that the federal organisation,
notably In the textile industries, may profoundly modify
the conception of workers' committees, which has taken
shape in the metallurgical industries. We must see
how far the federal Idea can be reconciled with and
adapted to the principle of amalgamation. Obviously,
the federal method has anticipated and, in some measure,
satisfied local sentiment. Meantime, it may be best to
conclude this section by completing my survey of the
new shop-stewards' argument for the workshop as the
right unit of local activity.

A point urged against the branch is that it is com-
posed of members from different shops and often of
divergent interests. Mr. Murphy thinks that the branch
has not the community of feeling found in the shop :
" Men working together every day become familiar to
each other, and easily associate because their Interests
are common. This makes common expression possible.
They may live, however, in different districts and belong
to various branches. Fresh associations have therefore
to be formed, which at the best are but temporary,
because only revised once a fortnight at the most, and
there is thus no direct relationship between the branch
group and the workshop group."

In his general scheme of workshop organisation,
Mr. Murphy is in substantial agreement with Messrs.

THE WORKSHOP 205

Gallacher and Paton. Mr. Murphy wants a Plant
Committee. " Without a Central Committee on each
plant," he says, " the Workshop Committee tends to
looseness of action. . . . On the other hand, with a
Plant Committee at work, every change in workshop
practice could be observed, every new department
tackled as to the organisation of the workers in that
department, and everywhere would proceed a growth
of the knowledge among the workers of how intimately
related we are to each other, how dependent we are
each on the other for the production of society's require-
ments. In other words, there would proceed a cultiva-
tion of the consciousness of the social character of the
methods of production. Without that consciousness
all hope of a united working class is vain and complete
solidarity impossible."

Subject to the reservations already indicated, we may
provisionally regard the workshop as the future unit of
Labour organisation.

VII. Trade-Union Structure and the New
Shop-Steward

Nothing could be more misleading than to measure the
shop-steward movement by its formal strength at any
given moment. Unlike an established trade union,
shop-stewards, with their concomitant works com-
mittees, can spring into life in a day. An unremoved
grievance, a foreman's blunder, an unguarded threat,
a thoughtless retort — any of these may unbolt the door
for the molten metal to run white-hot into the new
mould. Recently, a number of strikes, organised in
an hour on the new shop-steward model, have begun
and spread to large dimensions, unknown at first to the
leaders in the district. Granted either a scarcity or
control of labour, the conduct of a shop-steward cam-
paign is a comparatively easy operation. Apart from

2o6 NATIONAL GUILDS AND THE STATE

finance — a central problem — this simplicity of action is
as much the weakness as the strength of the movement.
What comes quickly to life goes quickly to death. If
the employees of a workshop can improvise amalgamated
action within their own sphere, there is no strong motive
to build up steadily and patiently ; we must expect
fluctuations in strength from shop to shop, from locality
to locality. That is precisely what has happened. We
know that, six months ago, the movement was strong
there, three months ago here ; a strike is threatened ;
it develops strength in other and unexpected areas. The
truth of it is that a shop-steward organisation, if unrelated
to the tougher and more enduring framework of a trade
union, whilst sensitive both to ideas and injustice, is a
delicate weapon. In favourable circumstances it may
prove effective ; over a period of average years, and
against organised capital, unhampered by State control, it
would almost certainly reproduce those local defects that
finally led the workers to centralise their organisations.

Our problem is to fit the new shop-steward into the
trade-union structure.

Bearing in mind that the two main purposes of the
new shop-steward movement are (a) to counterpoise
central authority by local power, and (b) to force amal-
gamation from below, we must agree that from this
standpoint it is sound policy to transfer the industrial
unit from a dozen trade-union branches to one workshop.
Since control is now the admitted object of both the
central and local forces ; since economic development
points in the same direction ; since, further, the con-
gestion of industrial populations has isolated the branch
from vital connection with the workshop procedure, there
remains no doubt that the industrial battle is destined to
be fought in the shop and not in the branch. The shop,
as the unit of industrial activity, has come to stay : is
already the kernel of the situation.

In searching for a new formula, two important con-
siderations jump to the eye. In the smaller industrial

THE WORKSHOP 207

populations, often depending upon less than half-a-
dozen comparatively small firms, the trade-union branch
is probably, even yet, the better instrument both for
attack and defence ; in Lancashire and elsewhere the
federal principle not only satisfies local sentiment but
has pushed it to such lengths that many of the more
far-sighted men are demanding much closer integration.
Nor must we forget that, in general, the centralised
unions secure higher wage returns than their more
provincial brethren. The point, however, that concerns
us is that the local union, whether federalised or isolated,
leaves less scope for the shop-steward, old or new. The
localised union official is at the oor of every employee,
and invariably has access to the employers. As the
textile union officials generally take a strictly business-
routine view of their functions (being hampered in
aggressive action by a high proportion of non-union
women's labour), the possibility of revolutionary action
is reduced to its minimum. In the mining districts,
where the federal principle also prevails, the check-
weighman is in attendance at every pit. The miners,
however, being homogeneous, have secured greater
advantages, under the wage-system, than the textile
operatives.^ Taking a broad view, it remains true that
the national union, centrally directed, is, in the main,
the economically stronger union. The presumption is
that this is due to organisation. Valuable though the
engineering and allied trades may be, granting them, if
you like, a higher standard of industrial craftsmanship,
the economic demand for clothes and coals is not less
exigent than for machinery and motor-cars. But this is
not a criterion of trade unionism ; I wish only to note
that, in the national union, the delegation of power to
the local unit carries the risk of wage depression.

The new shop-steward would probably reply that the
danger is more than counterbalanced by the increased

^ Since this was written there has been a considerable strike in the textile trade.
It failed, partly because of lack of ynjty between the spinners and weavers.

2o8 NATIONAL GUILDS AND THE STATE

economic strength gained by amalgamation. That, I
think, is true. Further, if amalgamation can be reached
by workshop unity of action, by rank and file insistence,
the risk is well worth taking. But that does not alter
the larger fact that the national structure is stronger
than either the local or the federal, with its corollary
that an amalgamated union is stronger on a national
than on a federal basis.

Appreciating, as best we may, the spirit that now
sweeps through the workshops, often, but not invariably,
finding expression in the new shop-steward movement,
we can postulate certain urgent problems which would
confront the general staff of the Labour Army, were the
Trade Union Congress to appoint one instead of, or in
addition to, its present Parliamentary Committee. This
General Staff, charged to concert a campaign for the
reduction of the capitalist fortress, would, inter alia, be
compelled to consider : {a) how to relate the workshop
to existing trade-union structure ; Qj) how to adapt that
structure to the new workshop propaganda, particularly
in regard to amalgamation and finance ; (c) how to
co-ordinate the centralised methods of the engineering
and allied industries, not forgetting the building trades
unions, with the federal methods that obtain in the
mining and textile industries — searching out the strength
and weakness of both principles and methods ; {d) how
to harmonise or even unify the glaring diversities of
wage-payments, both in each industry and over the whole
industrial population ; {i) how to relate the political to
the industrial forces ; (/) the general principles that must
guide Labour in its approach to workshop cantrol —
mainly an industrial but partly a political problem.

In regard to the workshop and the branch, it is certain
that the national union will not see its branches denuded
of power without taking precautionary measures. It is
evident that the trade-union branch must ^eX. into closer
touch with the workshop. There seems no reason why
the branches should not be reorganised in such wise

THE WORKSHOP 209

that the district organisation can be widened whilst the
branches are multiplied, one branch to one workshop,
subject to a minimum membership. But, without
amalgamation, this would overcrowd the workshop with
a multiplicity of craft and unskilled branches. The
climax would not be long delayed : the branches thus
overlapping each other would quickly be compelled to
adopt a more unified system ; amalgamation would
become not only inevitable but urgent. Why not .'' It
is not an issue •, it is plain common sense. Here, for
example, is an award by the Committee on Production :
" No. 430 Engineering and Foundry Trades." Forty-
eight different unions were parties to it. Looking down
the list, at least fourteen should be amalgamated into one
union ; in another group, three ; in yet another group,
eleven. These three groupings alone would reduce the
number of bargaining unions by one-half, and indefinitely
strengthen their economic power. The Labour Manager
of a large works known to me, employing forty thousand
wage-earners, is in almost daily communication with
twenty-four trade unions. If higher considerations did
not prevail — notably the necessity for a settled policy
in regard to Labour — how easy would it be to set all
these unions by the ears .'' And what chance have
twenty-four branches (several of them fifty miles away),
twenty-four district committees, and twenty-four execu-
tives in a contest of will and purpose against this capitalist
unit — a unit, moreover, itself a unit in the larger capitalist
organisation ? Viewed in this light, the economists' pet
phrase, the " mobility of labour," takes on an ironic
meaning, doubtless not intended, but, none the less,
disdainful.

We may assume, without further argument, that the
new shop-steward is the harbinger of amalgamation,
and that the basis of amalgamation is the workshop.
A merger of craft unions is clearly indicated — a first
step towards the conscious control of labour power,
in its turn asserting itself in workshop control. That

p

2IO NATIONAL GUILDS AND THE STATE

control remains incomplete, however, until the unskilled
and semi - skilled workers are absorbed ; until the
industrial union becomes an accomplished fact. Mean-
time, the struggle continues ; meantime. Labour must
make the most of the existing trade-union organisation.
The strikes so far led by the new shop-stewards have
been fought under certain favourable conditions : there
has been a definite scarcity of pivotal labour ; finance
has been a secondary consideration. But in normal
circumstances these conditions do not obtain, and,
accordingly, finance must be an important, if not a
vital, element in the struggle. It is contended by many
of the new shop-stewards that trade-union finance is too
much stressed ; that, granted workshop amalgamation,
the local strike can be carried on out of local financial
resources. The assumption is that short strikes in the
future will suffice. That is a gamble no responsible
Labour organisation should entertain. The Labour
revolution has but begun ; its efforts, now and for some
years to come, must be tentative ; every contingency
must be provided for. It would, indeed, be foolish to
build upon the same scarcity of labour as a basis for
aggressive action when, in addition to the present dilutees,
five or six million men are demobilised and thrown upon
the labour market. At least a million of these expect to
return to their former occupations. The immediate
future is obviously fraught with anxiety and gloom. Nor
is it the men who will always strike, whether on a rising
or a falling market ; trade-union leadership must also
provide for lock-outs, perhaps on an extensive scal^e.
Three instances are known to me of funds privately
accumulated for this express purpose. The conclusion
is that the workshop organisation, in its every stage of
amalgamation, must relate itself to the central organisa-
tion, and know its financial power, both in the way of
benefits, strikes, and lock-outs. With the recognition
of the workshop as the new centre of activity, executive
responsibility and local rights must be harmonised.

THE WORKSHOP 211

The war has, I think, given point to a suggestion I
made in 19 12. I then wrote :

" Hitherto food has been provided by means of strike
pay. This must cease : the method is obsolete. It is
not only haphazard and operates harshly upon men with
large families, but almost invariably hits the unfortunate
retailer. This is so universally the case that retailers find
their credit cut off upon the declaration of a strike. The
Co-operative Wholesale Society should be the natural
ally of the unions during a strike. This fact recognised,
the obvious step is for the unions to contract with the
C.W.S. for the supply of rations to all the strikers, regard
being paid to the number of each striker's family." ^

We now know the value of rations when campaigning.
One may hope that the lesson will not be wasted.

VIII. Wage Inequalities and Trade-Union
Personnel

Amongst the minor workshop embarrassments caused
by the war, not the least are the inequalities and diverg-
encies in wages in the same shop, the same bay, and
even at the same bench. A skilled worker, whose union
with sound instinct abides by time payment, may be
working with a dilutee, who earns more money on a
repetition job. The Guild principle of wage-equality,
necessarily preceded by wage-approximation, became
daily more remote as the war proceeded. Unless there
is a determined reversion to time-payment, we shall find
ourselves confronted with a proletariat seriously split
into a thousand fragments by kaleidoscopic differences in
wage-payments. The temptation to earn " big money,"
by piece-rates, bonus and other contrivances, is doubtless
alluring, particularly when the cost of living has more
than doubled. But, however strong the impulse to secure
a large weekly wage, it is imperative to remember that
the common denominator uniting all wage-earners is

' National Guilds, pp. io6 and 107.

212 NATIONAL GUILDS AND THE STATE

time. All deviations from the time-factor are concessions
to profiteering and a difficult obstacle to Labour unity.
Moreover, the imposition of piece-rates and bonus is
either a direct reflection upon the honesty of time-work,
or, alternatively, an undue exhaustion of human energy
and endurance. The employer says, in effect : " You
are not doing your best at time-rates ; I know you can
do better ; so I will put you on a basis that will stretch
you to the limit of your strength. In either contingency
you earn more money." Labour must reply sooner or
later : " The time-payment must be based on average
energy, with average output, calculated over a long
period of years. Let your scientific management find,
if it can, means to supplement our labour-energy ; it
will certainly not be allowed to intensify it."

The capitalist intensification of Labour means quan-
titative production (the immediate goal of capitalism,
faced with the war -debt and supplied with credit
specifically to pay both war principal and interest) with
a consequent deadening of social and political thought
and activity. The problem is to find the reasonable
unit of time in which labour can perform its task with
reasonable intensity. The permanent element is time
and not payment by results.

How far we have travelled from this essential basis
may be illustrated by an average case. A turner has
to calculate his wages from the following data : Day
rate pre-war, 42s. Add to this war-advance, 24s. 6d.,
for 48- or 53-hour week. But this 24s. 6d. may be part
bonus and does not therefore affect overtime. His
overtime may vary. It may be time and a quarter for
the first two hours, thereafter time and a half. For
Sunday it may be time and three-quarters or double
time. So far it is fairly easy sailing ; now our troubles
begin. Piece-work has to be superadded. To pre-war
piece-rates our turner must add 10 per cent and 6 per
cent. He has to discriminate between certain jobs
whether to charge 10 or 6 per cent, according to the

THE WORKSHOP 213

date upon which the original price was fixed. He is
not yet out of the wood. He has next to reckon 7^
per cent bonus for the time spent on piece-work or
I2| per cent bonus for time spent on day-work.
Confusion worse confounded, these rates vary amongst
fitters and turners, universal millers, slotters, planers
and millers. There are also machine-labourers, clerks
and repetition workers, men and women. Nor is that
the end of the puzzle. Amongst the labour-force, some
are working piece-work only, some day-work only,
some part one and part the other. To this must be
added a great variety of rates in different shops, to
say nothing of different districts. Prices are too often
fixed by individual bargaining with the rate-fixers.
Next, we must remember that any increase in output
by the piece-workers throws additional labour on the
day-workers, who are probably the repairing or labouring
section. If we can thread our way through this bewilder-
ing maze of tangled interests, we have next to encounter
fresh chaos on the appearance of new machinery, which
may combine two or three trades, previously working
on different bases. Follows a wrangle in lurid language
as to the rates applicable and the particular trade entitled
to work it. This wrangle may finally extend from the
shop to the trade-union branch ; may pass from there
to the Executive. If it is a " controlled " establishment,
a deputation may be sent to the Ministry of Munitions,
possibly ending in a strike, which will be bitterly
denounced as unpatriotic. In all these excursions and
alarms, one fact stands sure : the profiteer remains
master of the situation ; capitalist production indefinitely
prolongs its mastery by dividing the Labour forces.

No doubt the engineering industry is peculiarly the
victim of these vicious variations in wage-payments ;
but others are by no means exempt. In the textile
trades, the card-room men, the spinners and weavers
are as yet far from showing a firm front to the capitalist :
are straining and struggling amongst themselves to their

214 NATIONAL GUILDS AND THE STATE

general detriment : cannot or will not evolve a unitary
principle. At the moment, the spinning employers are
amassing huge fortunes, to some extent at least at the
expense of the weavers, whilst the textile wage-earners
are on short-time or " playing " one week a month,
when, if they sectionally united, they might make a big
stride towards their own industrial autonomy. They
have a federation, from which the card-room recently
withdrew ; they are strongly represented on the Cotton
Control Board : their sectional differences rob them of
the real fruits of their organisation.

Unless Labour can, in the immediate future, discover
a strong solvent for this inter-proletarian wage-struggle,
we shall almost certainly experience a recrudescence of
demarcation disputes, when peace brings its industrial
sauve qui pent. The danger lies in individual bargaining
on piece-rates ; the cure will be found in a reversion
to time-rates or, alternatively, collective contract. But
collective contract must base its estimates on time
expenditure or it will go the way of profit-sharing and
ordinary collective bargaining. It is known that many
trade-union leaders are anxious to meet the existing
situation with strong measures. Unless we are at the
heart of the struggle, we cannot realise the difficulties
that beset these leaders, not least the short-sighted
selfishness of their own trade-union brethren. On the
whole, I think it must be recognised that it is the new
shop-steward who has shown himself most alive and
alert to the dangers that lurk in sectional and individual
wage discrimination. He has a new and fresh point of
view : he has broken away from the sectional methods
of the trade-union branch ; his unit is the workshop
and not the trade union. He no longer regards the
bench as the perquisite of his particular craft ; the
shop presents itself to his eye as a ganglion of labour
nerves, all related to each other, touching each other,
within reasonable bounds of equal significance and
industrial value. Viewing the workshop in this light.

THE WORKSHOP 215

he impatiently awaits industrial amalgamation, with
unified command, that he may the more quickly achieve
strategical victory, where formerly only minor tactics
prevailed.

Here, as elsewhere, we meet the limitations of the
shop-committee, whether orthodox or new. Wage dis-
crimination is as much a national as a local question.
If action be taken in Leeds, its repercussions are felt
in Sheffield and Manchester. Barrow calls to the Clyde,
Woolwich hears the cry, which re-echoes through
Birmingham and Coventry. What in general is not
understood is the stupendous extent of this problem.
In many engineering shops I have been told that existing
official trade-union personnel is altogether inadequate to
the task of reducing it to some semblance of uniformity.
Unless the trade unions find men capable of coping with
the muddle, which daily grows worse, a small army of
bureaucrats will be let loose on the work and the last
stage will be worst of all. For, however agreeable these
divisions may be to the capitalists and employers, they
bring in their train social and industrial difficulties which
no Government can ignore. Far better the trade-union
official, trained to his trade, than the bureaucrat, who,
if trained to the trade, has probably graduated into
management. To an outside observer like myself, the
first step would seem to be a strong representative
committee composed in part of trade-union executive
members, in part of local men, shop-stewards and
branch secretaries, and in part of such industrial students
as the Labour movement can command. This com-
mittee's first task should be an inquiry into the principles
of remuneration, into the wage system as a whole,
particularly the bearing of time and piece rates upon
Labour solidarity. If they can arrive at some working
formula, its appHcation to local conditions can only be
ascertained by an experienced personnel assigned to each
locality.

I do not suppose that this work could be done

21 6 NATIONAL GUILDS AND THE STATE

efficiently with an expenditure of less than ;^50,ooo.
But it would ultimately save ;^5oo,ooo in strike-pay
alone, to say nothing of the monetary advantages that
must accrue from sane co-ordination of Labour's effort.
If the Trade Union Congress could shake itself free
from its lethargy and shibboleths, this is the work that
most plainly lies to its hand. As we cannot hope any-
thing from that quarter, allied unions would prove their
worth and sagacity by forming their own joint industrial
remuneration committees, without delay, in preparation
for the searching tests that peace must inevitably bring.

Among the minor inferences from what is here
written, I may perhaps remind any trade-union official,
who fears the effect of amalgamation upon his personal
fortunes, that the real work of trade unionism has, as
yet, barely begun ; that, as industrial unionism gradually
asserts itself, so the need grows greater for experienced
administrators, at every step from the workshop group '
to the central executive. The Guild theory implies
the industrial administrator in contradistinction to the
collective bureaucrat. Far from dispensing with existing
officials, trade unionism must soon call for many more.
It is permitted to hope that the future trade-union
administrator may find his work attractive and reasonably
secure. That will largely depend upon his sympathetic
understanding of young men and new movements.

IX. Some Implications of Control

It is clear that a strong blast of new ideas sweeps
through the workshop. Even more than ideas ; for in
many shops and localities these ideas have crystallised
into facts, in some cases going far to revolutionise shop
practice. We must recognise, however, that as yet the
movement is partial and inarticulate, whilst in many
districts old methods and traditions still prevail, the
movement such as it is leaving unruffled masses of sleepy
and irresponsive workers. The angel has not troubled

THE WORKSHOP 217

the waters ; the old diseases persist. Nevertheless, if we
compare the intellectual and economic activities in the
workshop with a bare decade ago, the result must surely
startle the least imaginative. The new conception of an
emancipated proletariat spreads with increasing volume
and momentum.

We have seen the more intelligent employers seek
to conciliate and divert the movement by transferring
discipline and amenity to workshop committees of
orthodox brand, manned by conventional shop-stewards
approved by their union branches. From the left, swift
and impatient, the new shop-steward has rushed on the
scene, brushing aside his ancient prototype and declaring
for workshop unity and structural amalgamation of the
industrial unions concerned, with the workshop as the
unit. Cutting athwart both these comes collective
contract, avowedly the half-way house on the way to
National Guilds. We have discovered problems insoluble
either to the workshop, in itself, or the national union, in
itself. We have accordingly been driven by the logic of
the facts to conclude that the centre and the locality must
establish new relations to each other, particularly in
increased local autonomy. Finally, we realise that the
industrial task confronting Labour is too great for the
existing official personnel; that the trade unions must,
reorganise and strengthen their administrative machinery.

The significant factor emerging is clearly this :
Labour is rapidly asserting its right to control the
productive processes ; it has passed the Rubicon and
marches towards mastery of its own action — by implica-
tion, to control of production. The Englishman may
be king in his own castle ; the employer is no longer
master in his own factory. At least, if he insists, it will
be an empty factory, silent as the tomb. But no 1 A
factory is not composed only of walls and machinery ;
it awaits the energising element of Labour. It is no
more a factory without labour than is a church a church
without the congregation. I have already remarked that

21 8 NATIONAL GUILDS AND THE STATE

the factory building and the machinery installed within
it are in the nature of a contract between the Employer
and Labour. Labour declares, with unanswerable force,
" I was induced to enter this factory because my skill
and my labour were required. By coming here I do
not forfeit my liberty nor any rights as a continuing
partner in this industry." This new point of view
carries us far.

However we may regard the situation now developing
in the workshop, it is obvious that Labour must either
pass on towards effective control, in the sphere it has
mapped out for itself, or it must be thrust back into the
crude wagery of the past. If it should be the second
alternative, then the war will have been a vain effort and
the lessons of recent years ignored and contemned. It
is possible that we may meet with reaction, fed upon
unemployment and post-war disorganisation ; but,
whatever the obstacles, I anticipate a forward and not
a retrograde movement by Labour in the workshop. If
so, then we may consider some implications of such
measure of control as has thus far been indicated.^

As the basis of every social upheaval is the spirit
informing it, let us first consider the psychological
aspect. In " National Guilds " I wrote of active and
passive citizenship. The former bore the mark of
economic freedom ; the latter was inherent in the wage-
system, a citizenship subdued by economic conditions
and necessities. Workshop control will psychologically
carry the wage - earner a considerable step towards
" active " citizenship, which will be reflected in the political
expression of Labour's desires. The point, if without
meaning to our practical politicians, is really enormously
important. It means neither more nor less than a
complete change in the spirit and personnel of the present
Labour party, whose spokesmen and followers cannot
apparently slough off the " passive " garments, cut for

' In July 1919 there were more wage-earners actually in employment than in
July 1914., including more than 3,000,000 demobilised soldiers. The output in 1919
varied from 50 to 75 per cent of the corresponding periods in 19 14.

THE WORKSHOP 219

them by master tailors. Inasmuch as the political must
reflect the economic, it follows that the new spirit in the
workshop, gradually growing into a master or " active "
spirit, must emerge in politics, bringing with it a new
conception of citizenship.

We have discussed, in a previous section of this
chapter, the differences between whole and part control
in the workshop. I indicated that there was a third
form of control which must be faced. We may call it
joint control. The Guild attitude towards control is
that complete exclusive control is preferable to part or
divided control. Messrs. Reckitt and Bechhofer, starting
from whole control, over however small an area, point
the way to an extension of it by what they aptly term
" encroaching control." ^ But Labour cannot afford to
ignore management nor the market price of the product.
For not only does Labour depend in some degree upon
prevailing prices, the extent of its activities is clearly
influenced by trade policy. One policy may lead straight
to quantitative production, another to qualitative. More-
over, workshop control brings responsibilities with it. It
is easy, as it is heroic, to declare that it will not touch the
commercial unclean thing ; it is not so easy to deny that
distribution is an integral part of production. Control
must be asserted over distribution pari passu with its
encroachment over the other industrial activities.
Pending, therefore, the complete Guildising of the
industry, and without assenting to profiteering by so
much as a wink, so long as Management remains what
it is, there must be joint conferences between Labour
and Management. This spells joint control : in no
way invalidates whole control, which proceeds steadily
on its mission of encroachment. Joint control, so
defined and limited, economically strengthens Labour,
at the same time guarding it against any entanglement
in capitalist theory or practice.

1 The Meaning of National Guilds, pp. 284-286, by M. B. Reckitt and C. E. Bech-
hofer. (London : Cecil Palmer and Hayward.)

220 NATIONAL GUILDS AND THE STATE

Closely bound up with joint control is the question
of raw materials. Is the management to procure the
raw material or is Labour ? And who is to pay for it ?
Another searching question : Who shall decide upon
the nature and quality of the raw material ? Labour
who makes the product, or Management who sells it ?
Clearly trade-policy here asserts itself in no uncertain
accents. Or shall the market decide ? If the market,
then how is craft control affected .'' The question brings
us back, with a jerk, to qualitative production and the
producer's control. Each of these questions predicates
joint conferences with joint decisions and the joint control
that flows from them. It is, however, equally clear that
if collective contract involves the purchase of raw material,
the scope of joint control is to that extent restricted.
Per contra, such purchase brings the worker into the
sphere of exchange and finance and compels him to
reconsider the whole problem of currency. Unless he
can establish a medium of exchange, always responsive
to the value of productivity of his own labour, it is certain
that what the capitalist loses on the commercial swings
he will recover on the gold roundabouts.

It is in the nature of the case that workshop control,
with or without collective contract, implies continuous
employment. Conceivably a workshop group might
become a close corporation, gradually shedding itself of
its less productive, or its unpopular, members : might in
the course of time become a second Oneida Community.
Conceivably — if it forswore its democratic basis. But
the essence of workshop control is industrial democracy,
the assertion in the life of the workshop of human
equality. Such equality means equal economic security,
or it fails to differentiate itself from capitalist methods.
But human equality is but one of the virtues of workshop
control. Men must be free to speak, to act, or to vote
without fear of unemployment ; they must always be
conscious of a security at least the equal of their colleagues.
Does John Smith suggest an economy } Then all must

THE WORKSHOP 221

benefit equally or John Smith may remain silent. Does
trade depression beat its ominous wings over the shop ?
Then let all suffer together. The plain meaning of this
is continuity or, if you will, community of employment.

This community of industrial interests demands
reciprocal duties and loyalties from the workers. They
must belong to appropriate unions : must pay their
levies : must share in the corporate life of their fellows.
But how if a refractory minority stand out, sharing but
not contributing .'' Are they to be free for all time to
benefit .'' I cannot avoid the reflection that this question
has not hitherto been frankly faced by the vast majority
of trade unionists. By a train of circumstances it has
not become a vital, or even a pressing, issue. The craft
unions have been strong enough either to conciliate or
ignore the non-unionists ; the unskilled unions have not
hitherto been numerically equal to the task of enforcing
what we euphemistically call voluntary membership.
But an industrial union is quite another pair of shoes.
It assuredly means workshop control, with economic
benefits greater than the average unionist at present
dreams of. Possibly the most valuable of these benefits
is the practical abolition of unemployment with a con-
sequent decasualisation of labour. A moment must
inevitably come when the unions, responsible for vast
commitments, will exercise powers to enforce trade-union
membership or to eliminate non-members from the
workshop on grounds of anti-social conduct. What is
sauce for the medical or legal goose is sauce for the
industrial gander. Further, since my contention is that
the industry should maintain its own reserve of labour
and that such maintenance should be paid through the
union, it is reasonable to expect that every beneficiary
should belong to his union.

Messrs. Reckitt and Bechhofer object to a compulsory
trade unionism enforced by the State on the ground that
it involves " an extension of public control over the
unions, which might go far to deprive them of their

222 NATIONAL GUILDS AND THE STATE

character as autonomous bodies "; and it is needless to
remark that any loss of corporate autonomy would be
too great a price to pay for legal compulsion. My
difficulty is with the practical fact that trade unionism
must be compulsory one way or another. If the unions
will not or cannot undertake to make themselves water-
tight, then, in the interests of collective bargaining, some
superior power will do it for them. For the present, I
content myself with the assertion that the trade unions
must face this issue in the near future, not only in regard
to unemployment, but also because of the large economic
responsibilities that amalgamation will surely bring with
it. Compulsory membership is in the logic of capitalist
if not of Labour development and cannot be long delayed
without obstructing vastly more important projects.

In concluding this long chapter on " The Workshop,"
it is, I trust, understood that I have not attempted a
survey of the workshop as a whole, but have confined
myself to certain aspects that bear upon the Guild
principle of labour monopoly applied to the actual
industrial processes. Nor have I, by any means, exhausted
the implications of workshop control. These transcend a
book ; they are the stuff of a new life, the seeds of a
new epoch.

Addendum to Chapter II

Mr. J. Paton, whom I have quoted in this chapter,
both in regard to workshop committees and collective
contract, kindly sends me this memorandum. As he
played a considerable part in the Shop Stewards' Move-
ment on the Clyde, his opinion is as interesting as it is
relevant.

" Workshop Committees designed to operate under
normal industrial conditions will have to be very
differently constituted from the unofficial ' Workers'
Committees ' which arose in Glasgow and other centres

THE WORKSHOP 223

during the war. The war-time committees were emer-
gency bodies which owed their power and influence to
a combination of circumstances which is never Ukely to
recur. There was an unprecedented shortage of labour,
wages were good, steady employment was assured as
long as the war lasted. Moreover, the national interest
demanded that the Government secure the co-operation
of the workers in the production of munitions and
avoid any prolonged strike at all costs. The workers
therefore occupied a strong strategic position which
rendered them to a large extent independent of Trade
Union support. Had it not been so, unofficial bodies
such as the Clyde Workers' Committee, with only the
exiguous financial support that could be raised by
voluntary collections in the workshop, could never have
exercised any material influence.

"In 191 5, Trade Unions, under the Munitions
Agreement, surrendered, for the period of the war, the
right to strike. By this measure well-organised strikes
on a national scale were rendered impossible and direct
action was confined to such local operations as could
be engineered by unofficial bodies prepared to risk the
penalties of defying the law and repudiating their bond.
It was soon apparent that the strike weapon was to be
very much in demand. The Government sought by
legislation to neutralise the power with which the peculiar
circumstances of the moment invested the workers.
The Munitions Act was a highly provocative measure
which revolutionised at a stroke the wage basis and
workshop practice of the entire machine industry,
curtailed the liberties of the worker, enhanced the
power of the employer and abolished jealously cherished
craft monopolies which had been built up by a century
of Trade Union action. It was not to be expected that
these changes would be submitted to by the workers
without protest. The ' Labour ferment ' spread like
wildfire as soon as the Act came into operation. Trade
Unions, with their slow and cumbrous machinery for

224 NATIONAL GUILDS AND THE STATE

negotiation, were quite unable to cope with the daily
crop of quite new problems that arose in every shop
over questions of wages, or bonus, or discipline ; and
unofficial shop committees sprang into existence to take
over the work. Broader questions of policy and principle
demanding instant attention and bold measures were
taken over — the Unions being hors de combat — by un-
official District Committees of delegates from the shop
committees. These Workers' Committees were in turn
linked up by a National Committee and the whole
organisation, except the shop units which had adminis-
trative functions as well, had avowedly only one policy
and one weapon, viz. the strike. And it must be ad-
mitted that nothing but the strike would have served
to impress the Government at that time. The sub-
sequent modifications of the Munitions Act were
undoubtedly obtained by the direct action organised
by the Workers' Committees, although of course these
bodies were never recognised by the Government, all
negotiations being carried out through official channels.
The point is, however, that the Committees could not
have achieved what they did but for the exceptional
circumstances of the war period and the compulsory
inaction of the Trade Unions. They were a hastily
improvised, and after all a very imperfect, substitute for
the Unions, essentially and merely militant in policy,
incapable of systematic administrative work. With the
cessation of the demand for munitions and the return of
the army of unemployed from the trenches, the economic
advantage which had enabled the workers to wage
industrial war independently of the Trade Unions was
at an end, and with that economic advantage went the
power of the unofficial movement, as the Clyde workers
learned to their cost in January 19 19. Henceforth the
workers' strength lay in organisation and the Unions'
funds, and it follows that if shop committees are to
remain as effective instruments of class action they must
be reconstituted on an official basis : they must be

THE WORKSHOP 225

established and recognised as an integral part of Trade
Union structure. Moreover, unlike the war-time
committees, which were necessarily concerned only with
immediate grievances, they must look to the future as
well. They must build as well as fight. They must
have a constructive policy directed towards control."

Ill

THE INFLUENCE OF THE WAR UPON
LABOUR

I. A General Survey

In the preceding chapters I have endeavoured, not
without some strain upon the imagination, to discuss
certain social and industrial factors in their normal
aspects, disregarding, as far as possible, the conditions
created by the war. The permanent situation is the
situation in times of peace ; war conditions are transitory
and abnormal. It was for this reason that I stressed
the historic origin of the new shop-steward movement,
seeking to show that its germs were in the economic
body prior to the war. But it would be foolish not to
take stock of the effects of the war upon Labour, for
these effects must persist for a generation : must create,
in fact, a new train of circumstances. We can never
revert to pre-war conditions : would not if we could :
most certainly should not if we would. In this chapter,
therefore, I shall try to state the position in which
Labour finds itself after five years of war-organisation.
This statement falls naturally into two main divisions :
the formal or statistical results ; the real or economic
results, these latter being difficult and perplexing.
Such a survey must cover :

(a) The membership and funds of the Trade Unions.

(b) The financial position of the individual worker.

(c) The movement, if any, towards solidarity.

226

INFLUENCE OF THE WAR ON LABOUR 227

(d) Changes in the spirit of the rank and file.

(e) The influence of Labour upon Government.

(/) Relations between " skilled " and " unskilled "
labour.

{£) Moral.

(a) Membership and Funds of Trade Unions

There can be no doubt that the Trade Unions have
considerably increased their membership since 19 14.
The Trade Union Congress of 1913 represented rather
less than i\ million members ; the same Congress in
191 8 represented \\ million Trade Unionists. This
growth is not only due to the accession of certain Trade
Unions, notably the Amalgamated Society of Engineers,
but to a definite increase in membership of the affiliated
unions. Thus, the National Union of Railwaymen shows
an advance from 273,000 to over 400,000, a striking
fact when we remember the great depletion of railway
workers throughout the United Kingdom who were
urgently required, not only for line regiments, but to
work the strategical railways on our various fronts.
During the period of the war, the Amalgamated Society
of Engineers has risen from 170,000 to 287,000. We
can only grasp the significance of this if we bear in mind
that, with a few exceptions, this great Union has steadily
retained its craft membership, and has never admitted
women. The " unskilled " unions have been very active.
By amalgamation and propaganda, the Workers* Union,
the National Amalgamated Union of Labour, and the
Municipal Employees' Association, whose combined
membership in 1913 was only 176,000, now present an
amalgamated front of over 500,000. The National
Union of General Workers and the Dock, Wharf,
Riverside and General Workers' Union, who, in 1916,
had a total membership of 153,000, are now united with
a membership of 400,000. These figures, I think,
indicate a tendency towards a definite increase in the
strength of " skilled " labour, and a definite decrease in

228 NATIONAL GUILDS AND THE STATE

the proportion of unskilled and non-union labour in the
vital industries of the country.

Women have joined some of these unions or alterna-
tively the National Federation of Women Workers,
whose distinguishing mark is neither craft nor skill but
sex. Altogether, the number of women Trade Unionists
has increased during the war from about 350,000 to
over 700,000.^

Generally stated, the Trade Unions have become
financially stronger. They have been debarred from
paying strike benefits, and unemployment benefits have
not been required in any appreciable degree. Some
unions have raised their subscriptions ; several have
invested heavily in war-loans. It is, I think, true that
in most cases the financial position is stronger than four
years ago. Thus, in 1 9 1 6, the income of the Amalgam-
ated Society of Engineers was one-third larger than in
1 91 3, whilst its accumulated funds have increased from
^^936,000 to ;^2, 1 60,000. In like manner, the funds of
the National Union of Railwaymen have advanced from
;^476,ooo, in 1913, to over ;^i, 000,000, in June 1918,
the annual income in the same period rising by ^6 per
cent. In 1913 the Workers' Union had an income of

1 MEMBERSHIP OF ALL TRADE UNIONS

Year

Number at end of Year,

Membership at end of
Year.

Percentage, increase (+),

decrease ( - ), on the

previous year.

1899
1900
igoi
1902
1903
1904
190S
1906
1907
1908
1909
1910
1911
1912

1913
1914
191S
1916

1.310
1,302

1.297
1,267
1.255
1,229
1,228

I.2S0
1.243
1,218
1,199

i,>9S
1,204
1. 149
1,135
1,123
1,106
1,115

1,860,913
1.971,923
1.979.412
1,966,150
1,942,030
1,911,099
1,934,211
2,128,635
2.425,153
2,388,727
2,369,067
2,446.342
3,018,903
3,287,884
3.987.11S
3,918,809
4,141,789
4.399.696

+ 's-9
+ 0.3

- 0.6
1.2

- 1.6
+ 1.2
+ 10.0
+ 13-9

- 1.5

- 0.8
+ 3-3
+23.4
+ 8.9
+21.5

- 1.7
+ 5.7
+ 6.2

INFLUENCE OF THE WAR ON LABOUR 229

only ;^43,ooo, with funds amounting to ;^i 2,000 ; in
1916 the figures were ;^96,ooo and ;^8 7,000 respectively.
If we have regard only to membership and finance, it
may safely be affirmed that, in the vital industries, the
Trade Unions are stronger now than in 19 13. But we
have yet to consider the economic position, which may
disclose adverse factors that more than counterbalance
the formal position here stated.

(1^) The Individual Earner

The increase in money wages has in most cases been
absorbed by a greater increase in the cost of living, a
decrease in real wages resulting. In the main and
ancillary war industries, it would be difficult to resist the
contention that real wages also have risen. That is to
say, the family revenue has risen beyond the increase in
the cost of family subsistence, due in part to the entry
for the first time into industry of a considerable army of
women — probably of more than 1,500,000, at nominal
wages of more than double those previously received by
working women. To these earnings must be added
some millions of army allowances.^

With stronger bargaining powers now possessed by
the Trade Unions, it is not impossible that nominal
wages may fall more slowly than the cost of living.
Not impossible ; but improbable. The delays and
vexations involved in industrial readaptation must sooner
or later lead to acute unemployment. Unless the several
industries frankly accept responsibility for the main-
tenance of the labour reserve, nominal wages will fall
quicker than the cost of subsistence. Unless the grip of
the State upon all profiteers who trade in life-necessities
is strengthened and maintained during the whole period
of readaptation and natural food-shortage, the painfully
acquired money or wage resources of the working-class,
as a whole, will be dissipated with certainty and rapidity.

' In agriculture the army allowances have in some cases exceeded the previous
wage-rates;

230 NATIONAL GUILDS AND THE STATE

(c) Solidarity

The psychological and physical facts of the war have
conspired with the logical development of Trade Union-
ism to bring us many steps further on the way to solidarity
and industrial unionism. The sense of regimentation so
essential in war, so penetrating in its effects, so destructive
of particularism, could not fail to find its counterpart in
industrial life. The example of the allied nations,
throwing all their resources into a common effort for a
common end, must inevitably teach Labour many lessons
— not least, the dominant need for organic coherence.
Coupled with these powerful influences, we have wit-
nessed the emergence of the workshop as an industrial
unit, for its own reasons demanding amalgamation. The
results are of enormous importance. There are now in
the United Kingdom about iioo Trade Unions, with a
total membership of over 4,500,000. The essential fact
is that the number of unions is decreasing, while the
membership is increasing. Amalgamation, or projects of
amalgamation, is mooted in all directions ; federations
or working arrangements (the precursors of amalgama-
tion) are now frequent and of increasing importance.
The formation of the Triple Industrial Alliance, finally
consummated on December 9, 1 9 1 5, is a red-letter event
in the history of solidarity. It is significant that two of
the three unions entering into this alliance — the Miners'
Federation and the National Union of Railwaymen — are
practically industrial unions.

As I write, among the craft unions, proposals are
now being discussed {a) for the amalgamation of 23
engineering and metal workers' unions ; (V) the amalga-
mation of 3 of the most important shipbuilding unions ;
and (c) the federation of all unions connected with the
cotton industry. (We see here the reactions of the
national or central union and the federal principle, which
I discussed in the last chapter.) In addition to these
projected craft amalgamations, I have already referred

INFLUENCE OF THE WAR ON LABOUR 231

to (d) the amalgamations of general labour unions, who
are now arranging for joint action or mutual support
between their 900,000 members, a class not long ago
regarded as " unorganisable." Nor does the movement
towards industrial solidarity stop here. At the Trade
Union Congress of 191 8 it was agreed to appoint a
committee to investigate the possibility of forming
industrial unions with provision for craft organisation as
an integral part of their structure. Whether it be the
spirit of the time or the increasing pressure of the work-
shop and shop-steward movement, it is evident that
Trade Unionism is massing its forces and feeling its
way towards unified control.

How far this solidarity will be reflected in politics it is
difficult to foresee. So far, political Labourism seems to
draw its inspiration from conventional formulae that have
already done duty for the orthodox political parties.
Nevertheless, if the Labour Party is to spread its activities
over the whole electorate, we shall be safe in assuming
that the new industrialism will impose its policy,
and finally encompass the political application of its
principles.

(d) Labour in the Administration

Keeping in view the distinction, previously drawn
in my chapter on " The State," between the State and
the Administration, regarding the Government as the
instrument of State policy, we may note that during
the war there has been a large accession of major and
minor Labour leaders to the administrative corps.
Since Sir David Shackleton and other trade-union
officials joined the Labour and other Ministries, and
particularly since 19 14, many hundreds of the less
prominent Labour men have taken an increasingly
active share in Government administration, both at the
centre and locally. There is a multitude of Labour

2 32 NATIONAL GUILDS AND THE STATE

Advisory Committees ; ^ a Labour representative sat with
a Government representative on the Labour Exchange
Committees, deciding all appeals against munition recruit-
ment for the Army ; Labour takes an official part in the
administration of rationing, of allowances to disabled
soldiers ; it plays a considerable part in pensioning ; it
has many representatives doing responsible work in the
Ministry of Labour. Official Labour has, in fact,
secured " recognition " at the moment when its more
progressive elements are threatening to repudiate it. In
too many cases the Labour men appointed to these
administrative posts have regarded Government employ-
ment as a sanctuary against extinction. It is a sound
generalisation that it is the reactionary or obese
Labour officials who find , surcease from struggle in
the companionable, if stifling, atmosphere of the
Bureaucracy.

Although we may regard these men as poachers
turned gamekeepers, it is not all to the bad. It is
true that they were urgently needed for more exigent
work in their own organisations, nevertheless their
penetration of the bureaucratic functions, sometimes
into the higher and important spheres, constitutes a
precedent which the future Labour Government may
find valuable. Nor will it have been in vain if it
teaches Labour the importance of retaining within its
own ranks its administrative elements. At present
there are too many goads and too Httle security.

(e) The Spirit of the Rank and File

It will be inferred from my last chapter, particularly
the section dealing with the new shop-steward, that a
new spirit pervades the rank and file of the Labour
movement. Taking a more general view than the

' It is not without significance that, in Lancashire and elsewhere, these Advisory
Committees, now known as Employment Committees, are pressing strongly for
executive powers. It is an unconscious expression of the Regional spirit demanding
administrative decentralisation.

INFLUENCE OF THE WAR ON LABOUR 233

workshop, we can see that the preoccupation of the
older and more somnolent Labour leaders with national
politics has induced a reaction amongst their erstwhile
followers, who have been thrown upon their own
resources, often in moments of danger and difficulty.
A more insistent democratic note has been struck ;
greater self-confidence has been engendered. This has
taken shape partly in the form of the workshop move-
ment, partly in the formation of " ginger groups," who
have urged the leaders to more strenuous efforts. It is
interesting to note that the National Union of Railway-
men officially recognise these groups, known as " The
District Councils and Vigilance Committees," to discuss
programihes and grievances. The engineering unions
have given countenance to local joint committees, whilst
in the coalfields of Scotland and Wales the Miners'
Reform Committees are formally committed to nationalisa-
tion of the mines, with control by the miners and a six-
hour day.

Daily contact with new problems has undoubtedly
widened and deepened the education of the rank and
file in questions touching their social, industrial, and
economic life and interests. The Russian Revolution,
the abortive Stockholm Conference, food-queues, censor-
ship — these and a hundred other incidents have stimu-
lated interest in world-problems. So, too, dilution,
the industrial future of women, the endless complica-
tions of wage-payments, scientific management, bureau-
cratic control, and many cognate issues have set the
workers thinking and acting in ways and directions
never contemplated by the prophets. The wage-earners,
the salariat, high and low, the administrators of capital,
the capitalist himself, all have become acutely conscious
of the new spirit, even though few have shown any
inclination or had the time seriously to probe the sources
from which it has come. The " practical " Englishman
remains incorrigible.

234 NATIONAL GUILDS AND THE STATE

(/) Skilled and Unskilled

As I must deal in the subsequent economic section
with the problem of dilution, which really embraces
the relations of " skilled " with " unskilled " labour, I
content myself by quoting from a private communication
kindly sent by an experienced and unbiased student of
industrial affairs :

" If the craft unions are to unite in order to defend
themselves against the labour unions, the forces of
reaction will have an easy triumph when the lean years
arrive. The hope for Labour is in the growing strength
of the movement for industrial solidarity, and the
rank and file even of those unions which pose as
the aristocracy of Labour may in time see the wisdom
of finding new and democratic leaders who will pursue
a policy of greater insight and foresight. Such leaders
will not be hard to find. It will be difficult to combat
the old school who point to the immediate selfish ad-
vantages of a policy of exclusiveness ; but the future
is beyond doubt with the more liberal party, whose
schoolmasters and missionaries are at work in every
industrial centre — in the workshops, if not, as yet, in
executive committee rooms in London."

I will only add one sentence : We may find on
analysis that the distinction between " skilled " and
" unskilled " resolves itself into relative degrees of
industrial organisation, or differing intensities of effective
demands.

{£) The Moral Factor

Notwithstanding the enforced relaxation of the
Trade Union codes and regulations, it can be affirmed
that the close of the war finds British Labour more
buoyant and confident that ever before in its history.
Never has there been such a receptiveness to new ideas
and bold policies. Nor need we fear psychological
depression from our soldiers returning from a victorious

INFLUENCE OF THE WAR ON LABOUR 235

campaign, where they have faced, unflinching, grave
reverses, and won through by a national tenacity, which
they will not be slow to turn to industrial purposes.
A victorious citizen army will not submit to industrial
oppression, if its leaders are as wise as the men are
brave. Concurrently, we have witnessed a sharp decline
in the prestige of Capital, whose incurable selfishness
compelled the State to take control. Each denial
by the State of the impudent claim of the employers
to do as they pleased has weakened the responsibility
of Capital and removed all justification for privileges,
which can only be based on the faithful performance of
responsible functions.

But if the State has been compelled, however reluc-
tantly, to curb the predatory methods of the profiteers,
it has discovered that its own intervention in industry
is sternly limited to public policy : that now as always
the tools are to the workman, who can alone give practical
effect to material needs. If we had to fight the war
over again, we should leave production to autonomous
industries, with the minimum of interference by bureau-
crats. The functional principle has asserted itself with
an emphasis not to be misunderstood. We now know
that it is not State control but rather industrial control
that will prove our salvation. From this Labour can
draw both inspiration and confidence. It alone, of all
the factors of our national life, has maintaine its func-
tional standard : its function is found to be vital and
permanent ; other functions have been cast incontinent
into the melting-pot.

No democrat would affirm that war is the supreme
test either of nations or classes ; but undoubtedly it
searches out our vices, weaknesses, and social errors.
If its mistakes have been many and sometimes dan-
gerous, yet Labour can look back over this rigorous
period with pride and satisfaction, emerging with an
invigorated faith, a widened horizon. Our men return
trained to vast operations, their minds coloured by

2 36 NATIONAL GUILDS AND THE STATE

great conceptions. The fusing of new principles with
these unexampled experiences opens vistas of an indus-
trial destiny more consonant with sanity and the humane.
Labour has glimpsed the meaning of economic freedom.
In the terror and devastation of war, in the sombre
memories behind us and the sordid necessities before us,
this stands sure : there is a new vision, and the people
shall not perish.

II. An Economic Survey

It is the antinomy of capitalist logic that national
prosperity by no means connotes Labour prosperity.
A simple instance proves this. Judged statistically,
India abounds in prosperity. We hear of vast irrigation
schemes, of railway projects, of large dividends, and
only occasionally and casually of Indian discontent.
Yet the Indian ryot is very much where he was before
we sent out our engineers and capitalists. Recently
there were riots in Japan, directed against speculators
in rice, who had won vast fortunes out of the hunger
and oppression of the Japanese proletariat, the immediate
victims of the world's shortage of food-stuffs. Are
we to gauge the prosperity of Japan by the dividends
of the rice speculators or the miseries of its peasants
and mill-operatives .'' Or shall we appraise the economic
position of the British mercantile marine by the dividends
of the shipping companies or the i5',ooo seamen who
have " paid the price of admiralty " in the years of
the war .'' Strange, too, if we ponder it well, that these
15,000 men at the bottom of the sea have by their
deaths actually enhanced the wages of the survivors.
Jonathan Swift, who so accurately calculated the value
of infants as butchers' meat, might now inquire at what
stage of this wholesale drowning would the shipping
trades suffer economic loss .'' To-day, as during the
whole period of the great industry, the sum total of
material wealth is no criterion of its diffusion. It is.

INFLUENCE OF THE WAR ON LABOUR 237

indeed, the capitalist assumption that, had the wealth
been distributed amongst the wage-earners, it would
not have been available as capital for new and ambitious
enterprises. The essence of the capitalist system is
that, to win success, concentration of capital is imperative.
Since this wealth is the basis of credit, it follows that, so
long as capitalism persists, Labour must be content both
to accept a commodity valuation of its labour and to
entrust the capitalist with the only available source of
credit. The class-struggle, therefore, assumes two
vital forms : (a) the rejection of the commodity valuation
of labour ; and (b) the organisation of credit based
upon a monopoly or control of the productive processes
and no longer upon " securities," defined by the cambists
of Lombard Street and the monopolists of the currency.
The Minister of Labour would resolve this antinomy
by continuing the capitalist system whilst, at the same
time, recognising the right of Labour to a larger share
in the distribution of wealth. He thinks these ends
can be attained in greatly increased quantitative pro-
duction. Apart from the doubtful wisdom of concessions
to quantitative production, there is no escape from
the dilemma that the wage-system definitely establishes
a collision of interests between Labour and Capital, or,
alternatively, the extent to which Labour absorbs surplus
value pro tanto deprives the entrepreneur of his credit
facilities in obtaining further capital. If, however,
I am told that increased wages can be paid out of increased
production, without impairing credit, the reply is decisive :
the credit obtainable out of increased production comes
out of intensified Labour, and is therefore the property
of Labour and not of the employer. It would seem a
difficult task to reconcile Labour and Capital by robbing
Labour of the one thing it can turn to account over and
beyond the cost of its sustenance. The truth of it is
that the Labour monopoly, bringing in its train wage-
abolition, constitutes i-pso facto a new system of credit,
based upon productive capacity, and no longer upon

238 NATIONAL GUILDS AND THE STATE

bank-paper, backed by transferable property, expressed
in gold or other commodity currency. The basic fact
of national wealth is the power and pledge of Labour to
produce wealth. And I repeat what I have often before
written : by wealth I do not mean illth ; Ruskin's ad-
monition remains the kernel of sound economy. The
Minister of Labour, like lesser mortals, must learn that
the capitalist method of obtaining credit is fundamentally
dishonest, in that it is negotiated by a forged promissory
note signed without Labour's per procuration.

These considerations are pertinent to our inquiry
into the economic influence of the war upon Labour.
The test is whether the power of Labour to supplant
capitalism has increased or diminished. The answer
hinges upon the progress made towards the Labour
monopoly and the capacity to evolve a new form of
credit.

A superficial reading of the previous section, dealing
with the formal position of Labour In war-time, might
lead to the conclusion that the Labour garden Is bloom-
ing. But are there no weeds .'' What of dilution }
What does it mean In terms of organised Labour that,
whereas two million women have gone Into industry,
only 350,000 of them have joined the trade unions }
Does this mean a million potential blacklegs .'' More-
over, what is the position of 4.\ million trade unionists
when 4J million men return from the colours ^ When
these factors come into the picture, it would seem that
any roseate conclusions are premature.

Before I examine In detail the effects of dilution, a
new development may be noted. It is one of the most
significant incidents in the history of trade unionism,
for it marks the beginning of the trade-union absorp-
tion of the salariat, the first step towards the Guild
conception of Labour organised to include manage-
ment. No apology, therefore. Is needed If I tell the
story at some length.

The Iron and Steel Trades Confederation Is a power-

INFLUENCE OF THE WAR ON LABOUR 239

ful trade union, which, with its affiliations, comes very
near to a monopoly of Labour in iron and steel plants.
It is by no means revolutionary in its methods ; in the
concourse of Labour ideas it is probably on the right
rather than the left. It is fully recognised by the em-
ployers, who constantly meet it in conference. What-
ever steps the Confedei^ation takes are more likely
to be dictated by practical affairs than by abstract
principles. In an award, number 2299, of the Com-
mittee on Production, we find this conservative and
cautiously managed trade union acting for a body of
men known as " sample passers." This small group
is either recruited from first hand steel smelters or
they graduate through the laboratory. An exact
knowledge of their status is essential if we are to under-
stand all that is implied in this unique arbitration.
Although paid weekly, they undoubtedly belong to the
salariat. The Committee in their award state that
" they act as foremen and supervisors in connection
with the working of the furnaces. They work out the
details of the furnace operations as decided upon by
the steel works manager. They are responsible for
the proportioning of the materials which make up the
charge, for the taking of samples for analysis, and for
seeing that the furnaces are kept in good order and
worked in accordance with instructions. Their duties
are solely those of supervision and maintaining dis-
cipline, and they act under the direct orders of the
steel works manager." The Committee offers con-
clusive proofs that they are not wage-earners in the
accepted sense of the term, for they are paid during
holidays and sickness. That is to say, their labour is
not on the commodity valuation ; they are paid on a
managerial basis. The Committee on Production state
definitely that " they are dealt with as a part of, and on
the same lines as, the general management staff." Nor
do they appear to be starving. At the time of the
award their average earnings were £13 : 5s. a week,

240 NATIONAL GUILDS AND THE STATE

having obtained an average increase during the war
of;^4: IIS.

In October 191 7 the sample passers in the majority
of plants applied for an advance. Certain of them met
representatives of the employers, but failed to obtain
any addition to their pay. In the first instance, let us
observe, they behaved like gentlemen and not wage-
earners ; no trade-union interference ; they went direct
to the management, and doubtless, in simple and heart-
felt language, told their doleful tale of difficulties to
make ends meet on a beggarly ;^I3 a week. Not dis-
mayed when judgment went against them, they requested
the Confederation to intervene on their behalf. A
claim was accordingly submitted for the full sliding-
scale percentage, to be retrospective as from June 1917.
I do not know, but I suspect that this would have
meant ^1^0 to each oppressed sample passer. The
Employers' Association point-blank declined to recog-
nise the Confederation in this claim. I can indeed
understand their pained surprise. However, the Con-
federation went to arbitration ; evidence and argu-
ments were heard with all decorum, and the award
lies before me. " After careful consideration of the
evidence placed before them," the Committee decided
that the claim had not been established. I invite atten-
tion to the reason : "In the opinion of the Committee,
the nature of the duties and responsibilities of the men
concerned are such as to make it undesirable that any
change should be made in the practice that has uniformly
prevailed hitherto, under which the remuneration [note
passim, remuneration, not wages] and conditions of
service of the sample passers are regarded as a matter
for direct discussion and adjustment between the manage-
ment of the firms concerned and the men themselves."
The Confederation, as a common trade union, was thus
politely bowed out. We may infer that the case was not
decided on its commercial merits, because " the Com-
mittee think that it would be of advantage if the firms

INFLUENCE OF THE WAR ON LABOUR 241

affected were to take an early- opportunity of conferring
with a view to adjustments being made in those cases
in which the earnings of the sample passers under the
existing rates of payment are below the average obtaining
through the several works as a whole."

In plain terms, these minor members of the manage-
ment are told that they must play cricket : must not
keep low company : can rely upon it that, as " hawks
do not peck out hawks' een," they can get what they
want, if they go about it with softer tread and less
threatening mien. The award, however, does not end
the episode. The Confederation protests on several
points, but notably this : " The observations of the
Committee with regard to the method of negotiation to
be adopted by the sample passers are entirely gratuitous.
Whether the men should adopt either individual or
collective bargaining was no part of the terms of refer-
ence, and in the interests of good relations as between
employers and workmen, the Committee would have
been well advised to have left that question for settle-
ment between the parties concerned. The inter-
ference of a Government Committee in such a matter
is unfortunate, since it cannot fail to create in the minds
of the men a lack of confidence in the Committee's
impartiality. The Committee would have served the
interests of all concerned with much better effect if it
had exercised its legitimate functions by making those
adjustments which, in the concluding sentence of its
award, it indicates are necessary."

The papers do not disclose whether these sample
passers are members of the trade union which took up
their case. Possibly the promoted first hand steel
smelters had retained their connection ; probably those
who had been appointed from the laboratory had no
thought of joining. I do not know ; nor does it matter.
The striking fact is that here is a trade union invading
a province hitherto sacred to management : demanding
a considerable increase in pay on behalf of men already

R

242 NATIONAL GUILDS AND THE STATE

earning anything from ;^500 to ;^700 a year. It is a
portent, marking a new sphere of activity for trade
unions. We know that the Railway Clerks' Association
draws closer to the National Union of Railwaymen ;
we know that there is a Clerks' Union that showed con-
siderable activity and some strength prior to the war ;
but what are we to make of a trade-union demand to
increase the pay of supervision from £600 to ;^iooo }

We can hardly refrain from connecting this case
with the workshop activities described in my last chapter,
particularly the question of foremanship. We can be
tolerably certain that these sample passers, having
invoked the aid of a trade union, are for the future
suspect. The Confederation will doubtless have to
watch closely whether the future sample passers are
recruited from the laboratory or from the operative
steel-smelters ; whether the function of sample passing
is recovered by the management and re-established in
status, or whether the management will gradually re-
linquish it and retire to other defences. I am not here
concerned with the concrete case of this particular
group — in eleven large firms there are only thirty of
them •, what concerns my argument is the fact that
here is a trade union intellectually willing to extend
its boundaries to include the salariat. Nor must we
forget that the phenomenon has occurred in a blackleg-
proof union.

It may be argued that the sample-passer is a type
of foreman engaged in an industrial process, more
nearly concerned with technique than with management.
This may be so, even though the Committee on Pro-
duction ruled otherwise. An alliance of management,
strictly considered, with a trade union, can now be
found in the Railway Clerks' Association, whose activities
in recent years read like a romance. Incredible though
it seem, it is a fact that prior to the war railway clerks'
wages on the Welsh railways did not exceed £^0 a
year. Elsewhere the rate varied from ^60 to ;^90. In

INFLUENCE OF THE WAR ON LABOUR 243

1 910 the maximum on the Midland Railway was
;^iio. During the war these salaries were of course
augmented by bonuses. Meantime the Railway Clerks'
Association grew in strength and grace, so that, by
July or August 191 9, it was in a position to bargain
with the Railway Executive Committee, acting on
behalf of the Government. After protracted negotia-
tions, a scale of salaries for the whole clerical staff of
all the railway services was arranged. By this scale
boys of 15 and 16 are to receive more than the grey-
beards of 1 9 14. The senior scale, beginning at the
age of 18, starts at iCSo, rising to ;^2oo after fourteen
years' service. Add to this the bonus, which broadly
follows the Civil Service scale. I must not, however,
linger on such jumps in prosperity, for they are not
particularly germane to the question of management.
The settlement provides for classification. Thus, clerks
in the Fourth Class start with a minimum of jC'^io ;
the Third Class' start at ;{240 ; the Second Class at
£iyo; the First Class at £,320. This clearly covers
the lower ranks of management. But the settlement
does not stop here : stationmasters and goods agents
are also included, their salaries ranging, according to
class, from ;^i5o to £350. Above that the maximum
is fixed by the position and importance of the station.

A trade union with a membership including, or
open to, every grade, from a first class stationmaster
down to the humblest clerk, must inevitably exercise
a definite influence upon managerial policy. When
that Union, in its turn, co-operates (as it does) with
the National Union of Railwaymen, it is evident that
a Railway Guild is in sight. But there is more to
tell. There are indications that the Railway Executive
Committee had determined to limit the action of the
Railway Clerks' Association to a maximum of jCs^o.
This attitude, if it existed, collapsed before the confer-
ence ended, and the Association, it was agreed, should
at least have official cognisance of the terms and salaries

244 NATIONAL GUILDS AND THE STATE

of officials with " more than ordinary responsibility."
The classification of these positions, "above First Class,"
are to be submitted to the Association. The £,25°
barrier has been broken down. We can see the conse-
quence in the programme issued by the Railway Clerks'
Association, in which every scale of salary from £'jo
up to ;£iooo is included. This, I imagine, comprises
the great majority of the functional hierarchy.

The intervention of a trade union on behalf of a
managerial group is, no doubt, rare ; it is, nevertheless,
symptomatic, as lightning reveals electric disturbance.
It definitely bears upon the suggested test whether
Labour is as yet capable of supplanting Capitalism.
For, either the managerial groups obey an economic
function or play a non-economic part as Capital's police-
men. I do not doubt that in the winnowing processes
of the functional principle, many so-called directive
functions will be proved to be valueless, and, therefore,
an economic waste — an economic waste whatever their
commercial utility ; but we shall discover that many
directive functions, particularly those based on technical
or special training, are of undoubted economic value.
In so far as these managerial occupations contribute to
the wealth of the community, it is evident that Labour
must absorb them, must win their allegiance from
Capitalism, if it is efficiently to supersede the existing
system. Twenty years ago, I wrote in an American
magazine that Socialism must fail unless it could win
to its side the man with £600 a year. We have travelled
far since then — from State Socialism to the idea of
National Guilds, from faith in an omnipotent and all-
pervading State to a settled conviction in the necessity
of separating the political from the economic functions.
But I was substantially right ; Democracy must con-
solidate and control all the industrial forces, unifying
and harmonising all those elements that clash in a
devastating class struggle. The significance of the
sample passers' arbitration lies in this : it is the first,

INFLUENCE OF THE WAR ON LABOUR 245

or an early, rapprochement between organised Labour
and technical management. Collective contract would
expedite this movement, compelling the lower ranks
of the technical hierarchy to declare themselves ; still
more so, if it embraced the purchase of raw material. It
would be foolish to prophesy when, if ever, the sample
passers' arbitration and collective contract will become
the ordinary routine of industrial life. I content myself
with one observation : taken in conjunction with work-
shop control, the new shop-steward, the changing status
of the foreman, the increased bargaining power of the
trade unions (partly political, mainly economic), they
are indices pointing the degree of Labour pressure on
the industrial machine, in war-time.

III. Gold and Credit

The essential value of technical direction in pro-
duction is not, I suppose, in dispute. We shall probably
agree that many managerial groups on the commercial
side of industry are superfluous and non-economic ; but
the man skilled in technique and capable of directing
his fellows in the best production is precious as rubies.
If, then. Labour weans the technician from the Capitalist
influences, drawing him into its own family, it gains
substantially in its control of production, thus approach-
ing organisation on Guild lines. Subject, however,
to an important proviso : that it utilises its enhanced
industrial solidarity by applying it to newer and saner
methods of credit. Since the test is whether Labour
grows organically so strong that it can, within an appreci-
able time, supplant Capitalism, it follows that this
enhanced industrial power must not lie dormant but
must be actively applied to the task of doing for itself
what previously the Capitalist has done for it. The
business of the Capitalist is to find capital ; if Labour
can procure its own capital, the Capitalist's occupation
is gone. The war has taught Labour, if it did not

246 NATIONAL GUILDS AND THE STATE

know it before, that capital comes in the form of credit.
No doubt this credit has been measured by a gold standard
and meted out on a certain elastic ratio to gold, so that
the owners of gold — the banks and their clientele —
have been able to control the money market by imposing
upon industry, as a fixed charge, payable on demand,
the commodity value of the gold coinage. But the
elastic credit, necessary to the conduct of the war (or so
presumed and admitted), has now been stretched to almost
transparent tenuity ; so much so that the gold basis,
upon which these vast credit transactions have been
based, is now submerged in a mass of national and
industrial commitments, which take little or no account
of their gold parentage. This elastic credit is stretched
to breaking-point ; but it still holds, and there is reason
to apprehend that an attempt will be made to bring
back credit to within nodding distance of the value of
an ounce of gold — the purchasing power of an ounce of
gold — as it stood on August 4, 1 9 1 4. It needs no mathe-
matical mind to realise that if this stupendous ramp
succeeded, British capitalism would aggrandise itself to
the extent of the cost of the war, since to-day an ounce
of gold will only purchase one-half the commodities
it could command when the war began. Mr. Arthur
Kitson, in his over-stressed and rather one-idea'd book,^
puts this plainly :

" Now the actual value of this money when sub-
scribed, may be readily traced by studying the daily
market quotations for all kinds of commodities. The
value of the pound in wheat at the time of the last loan
was from 2 to 3 bushels, in potatoes from 50 lbs. to
60 lbs., in butter from 8 lbs. to 10 lbs., in eggs from
80 to 100, in steel from 20 lbs. to 30 lbs., in rolled brass
from 1 2 lbs. to 20 lbs." Putting labour at its commodity
and not its community value, its price would necessarily
respond. That is to say, that we, as a nation, borrowed
cheap pounds. If, however, we are to repay at pre-war

1 A Fraudulent Standard, by Arthur Kitson. (London : P. S. King & Sons, Ltd.)

INFLUENCE OF THE WAR ON LABOUR 247

rates, by the bankers' simple expedient of restoring
paper-money to its old ratio to gold, we must repay
in dear pounds. The nominal debt remains unchanged,
but Labour must repay in commodities twice the amount
it borrowed in commodities. In estimating the economic
influence of the war upon Labour, it is clear, I think,
that we must look closely at the purchasing capacity of
wages in war as compared with peace. Undoubtedly,
if the labour commodity, in tune with other commodities,
can be subjected to extortion by the mechanism of the
money market, it follows that Labour organisations
must be judged by their power to resist high finance,
as a part of their resistance to industrial capitalism.

It is a mistake, however, to ascribe to any currency,
whether based on a commodity like gold or silver, or
only on paper, too great an importance. It is com-
paratively a small matter what substance we employ
to express value if we are free from any mechanical
restrictions upon the creative values. In poker it is of
small moment whether you play with ivory chips inlaid
with gems or with matches. The stakes are not re-
stricted by the nature of the counters, which are only a
convenience and not absolutely necessary. The grava-
men of serious criticism against the existing monetary
system is that the owners of gold consciously and deliber-
ately limit industrial enterprise, because they are bound
to preserve a measurable relation between the gold
reserve and the demand for credit, expressed in gold
values. The consequence is that if the gold reserve
is low, credit may be rendered oppressively dear or
refused sans phrase. No matter how sound the venture,
how socially desirable, the money market is inexorable ;
money refuses to talk ; money is master of the situation.
I remember, as a young man, listening to a discussion,
in the Council of the City where I lived, on a proposed
municipal loan for a trifling quarter of a million. The
money was urgently required for an extended drainage
system, due to the growth of the population, and for

248 NATIONAL GUILDS AND THE STATE

other purposes affecting the health and comfort of the
citizens. To my surprise, the Finance Committee
opposed the proposal. Not, if you please, on its merits ;
on the contrary, its urgency was recognised. Not
because there was no satisfactory security ; on the con-
trary, there was security ten times over. Because, if
you please, the money market was unfavourable ; a
municipal ban just then would have had to be floated
at a rate of interest higher than such a gilt-edged security
would warrant. This city of 150,000 inhabitants,
largely engaged on a vital industry, had to imperil its
health, to postpone important projects, to wheedle and
argle-bargle and finally await the pleasure of Lombard
Street and its satellite investors, shepherded by trust
and finance companies, in themselves a dangerously
parasitic industry. This experience is, of course,
common enough ; it may involve an epidemic ; it may
equally create unemployment ; it may strangle a new
industry at its birth (as it has done a thousand times) ;
it may, and does, compel honest men to shoulder burdens
that ought not to be burdens, transforming a social value
into a continuing debt. But what will you ? The gold
standard is sacred.

It is so sacred that its advocates do not even trouble
to defend it ; its justification is assumed to be beyond
criticism. Thus, Mr. Hartley Withers :

" Good banking consists in giving as much assistance
as possible to trade in the matter of credit, and, at the
same time, restricting credit as soon as the proportion
between cash and liabilities is below the point at which
prudence and caution require that it should stand." ^
That is certainly good banking, and, granted the gold
basis, no banker can do otherwise. But the inference
would seem to be fatal. If the banker is bound by
prudence to restrict credit to available cash, and if
credit is required beyond a prudent cash reserve, the

^ Tie Meaning of Money, p. 78, by Hartley Withers. (London : John Murray.)
See also Money and the Mechanism of Exchange, by Professor Stanley Jevons. (Loi)don :
Kegan Paul.)

INFLUENCE OF THE WAR ON LABOUR 249

only possible inference is that, however successfully
the existing bank system may have functioned in the
past, modern economic developments have gone, or
must go, outside its narrow ambit, to seek new sources
and methods of credit. We are rapidly approaching
the moment when we may be compelled to break away
from credit restricted by the gold reserve to credit
related no longer to gold but to productive capacity, in
the light of effective demand.

The conclusion is that the question of currency bifur-
cates into two different, but related, problems : the one
of the nature of currency ; the other, and vastly more
important, of credit facilities in the production of com-
modities. The immediate issue in regard to currency
is whether Labour is powerful enough to resist any
attempt to return to the pre-war ratio between paper
and gold : whether it is in a position by intelligence
and organisation to insist that it will only repay one
hundred eggs, the number borrowed, and not 200, the
number that might be called for by the gold magnates,
could they succeed by withdrawing paper in reducing
the present " inflation." It is usual to speak and write
of inflation as though it were a disease ; it is only by
inflation that war-production was possible ; if inflation
is such a powerful lever in war, need it be less effective
in peace ? We may observe, too, that this inflation,
resulting in cheap money, has been applied as capital
in the creation of war industries and not only or primarily
as an expedient to tide over a period of financial stringency.
Not only so, but the basis of value has been transferred
from the former commodity value intrinsic in gold to
the wider value inherent in national credit. Since the
gold reserve is probably not one per cent of the paper
money in circulation (" payment in gold, on demand "
has become a figure of speech), it is evident that what the
holder of paper money expects is not gold, which in
this sense is valueless, but the equivalent in commodities,
on demand. The Food Controller knows this ; apart

250 NATIONAL GUILDS AND THE STATE

from the urgency of equitable distribution, he has had
to fix prices based, not upon the gold standard, but upon
the social necessities of the national life and conveniently
expressed in existing monetary terms. " Inflation,"
properly understood, means a method of exchange
independent of gold " with a mark upon it to determine
its weight and fineness." Naturally enough, Lombard
Street dislikes it ; but it is neither to be condemned nor
commended on that account. It is solely a question
of the value in commodities realisable by paper-money.
That resolves itself into a further and more difficult
inquiry into the relative and exchange values of com-
modities — in a word, into the soundness of our national
economy. Does every stroke of the hammer, every
flight of the shuttle, every driven nail, the turning of
every clod of soil add to our wealth ? Then all is well.
In these and ten thousand other human efforts, we shall
find real value. Viewed in this light, we can but marvel
at the unconscious effrontery of those who would measure
it by a gold bar in a glass case in the Mint.

This excursus into currency seems desirable, before
we can reply yes or no to the question whether Labour,
during the war, has gained or lost strength (a) in the
exchange value of the labour commodity, and (^) in so
organising that it can, when the time comes, provide
for credit in carrying on transactions independent of
Capitalism. We may say of the first that Labour has
gained by inflation, and that, by its increased bargaining
powers, could, if it would, continue the inflation, until
such time as the State would accept a new basis of
exchange value in consumable commodities and no
longer by a legally enforced valuation by a gold standard,
itself variable, and variable at the will of those who
themselves gain by the variations at the expense of
Labour. But I have, as yet, seen no evidence that
Labour has even begun to consider credit as it affects
industry now and in the future. Nevertheless, Labour
is in a position to affect credit in ways impossible before

INFLUENCE OF THE WAR ON LABOUR 251

the war. We have seen that the credit indicated in
paper-money is now found in the State and practically
without regard to the value or reserve of gold : that,
in consequence, the security of paper-money must be
found in the productive processes. In other words,
we now see how feasible it is to issue currency guaran-
teed as to value by community production. From
community to group production is an easy transition.
Therefore, those who control group production can,
when so minded, arrange credit in commodities on the
security of the group guarantee to produce the equivalent
in a given time and under agreed conditions. Indeed,
Labour may be forced to provide its own credit or be
disintegrated by unemployment and trade depression.

The extension of credit beyond the ratio to the gold
reserve fixed by prudent bankers is naturally exercising
many minds. A favourite proposal is to nationalise
the banking system. But the continuation of existing
currency methods by the State, whilst decidedly better
from the political standpoint, would afford but little
relief to those in search of credit. Even a group of
engineers or shipbuilders might find that the State
would call for securities over and above the output
against which credit was demanded. Obviously, a
new principle of credit must be formulated. Turn it
round and about how we will, this formula must spring
out of organised production. When this is realised.
Labour will at least be consulted and its co-operation
demanded. From co-operation to control of credit is
largely a question of Labour organisation, embracing
the directive elements, as yet under the tutelage of their
employers, but even now contemplating the transfer of
their allegiance.

IV. Dilution and After

In the three preceding sections of this chapter, the
favourable elements of Labour's situation in war-time

252 NATIONAL GUILDS AND THE STATE

have been mainly considered. We have discovered,
to the surprise of many superficial observers, that the
Trade Unions have grown in membership and financial
strength ; that, freed from the incubus of unemploy-
ment. Labour has stiffened its demands and shown a
resilience and vigour never before witnessed ; that new
ideas and a wider horizon have become visible. In its
more strictly economic aspect, we have seen a growing
industrial solidarity, not only in the direction of union
amalgamation, but in a tentative and significant rap-
■prochement towards the salariat. Moreover, we see,
dimly as yet, that in its growing control over the pro-
ductive processes, Labour, if intelligently alert, can
prevent a return to dear money, and perhaps evolve a
new system of credit. We may set down all these
factors to the potential side of Labour's balance-sheet,
and proceed to the consideration of the adverse influ-
ences. These broadly are two : dilution and unemploy-
ment. There are, of course, adverse conditions, such
as trade depression, which seriously affect the com-
munity as a whole ; I refer here only to such weak-
nesses and dangers as threaten the Labour organisation
as such.

It is contended in Marxian circles that dilution is
not the creation of the war ; that it is implicit in the
Capitalist system ; that sooner or later, the semi-skilled,
the unskilled and women would have been pressed into
industry under whatever excuse came readiest to hand ;
that accordingly the war only accentuated the inevitable.
There is nothing in the logic or spirit of capitalism to
preclude such a development. It is not unreasonable
to suppose that capital would sooner or later have
exploited the growing cleavage between craft and
industrial unionism. Be that as it may, the facts are
sufficiently startling. From 191 5 down to the end
of the war, every craft monopoly has been ground in
the mortar ; the pivotal positions in the workshop have
shrunk to a minimum ; the semi-skilled and unskilled

INFLUENCE OF THE WAR ON LABOUR 253

worker, man and woman, has been at work hitherto
supposed to be the monopoly of the trained industrial
craftsman. Moreover, thousands of employers, having
trained these dilutees, prefer them to their former em-
ployees, and will undoubtedly retain them if permitted.
Everything depends upon the attitude assumed by
Labour towards this new industrial army. If enmity
be shown, the employers have only to divide and conquer ;
if absorption into the Trade Unions be the policy adopted,
then Labour has under its control a considerable accession
both of skill and numbers.

The progress of dilution has been in two stages :
first by the semi-skilled and unskilled men rushing into
munition manufactures in the early months of the war,
where they have remained under " protection " ; secondly,
and subsequently, by a million or more women, who
now constitute the real problem. But the semi-skilled
and unskilled have not remained in their previous
industrial status ; on the contrary, they have from the
beginning gradually acquired skill in increasing degree
and numbers, so that to-day, making all allowance for
men who have consistently been engaged on repetition
work, it can be said that many thousands cannot be
distinguished by the quality of their work from men
who have graduated through orthodox apprenticeship.
They have been encouraged in this by the Government,
who have adapted or organised sixty or more technical
schools and colleges for training purposes, mostly for
men, in certain cases for women. Probably 50,000
semi-skilled workers have been trained in these institu-
tions. Not only in the simpler work : over 20,000
have been taught difficult and intricate processes. Strictly
on the merits of their work, ignoring the Trade Union
rules as to apprenticeship, it can hardly be denied that
a considerable proportion of these dilutees, particularly
of 19 1 5 and 1 916, must now be regarded as skilled
workers. The Government may redeem its pledge to
restore the pre-war conditions ; that does not affect

254 NATIONAL GUILDS AND THE STATE

the skill or otherwise of the earlier dilutees, who have
stood the test. It would be certainly unwise for the
craft unions not to take this fact into consideration. If
they exclude them from membership, the general labour
unions will accept them, with the inevitable result that
the unskilled unions, so-called, will claim a great variety
of jobs which, in pre-war days, were regarded as the
prerogatives of the craft unions. If, however, these
skilled dilutees are accepted for what they are, the craft
unions, industrially considered, are so much the stronger.

The skilled dilutee, however, is not relatively a difficult
problem. Even if his numerical strength should reach a
quarter of a million, it is a feasible task for the craft
unions to absorb him. It is when we consider the in-
dustrial position of women that our troubles really begin.
We shall be on the safe side if we assume that, throughout
the munition firms of Great Britain, when the Armistice
was signed, fifty per cent were women. Probably, too,
in the other industries, an equally high or higher per-
centage obtained. Without committing ourselves to
numbers or percentages, it suffices that in 191 8, as
compared with 19 14, there was an increase of 1,500,000
women in industry.^ From this we must make certain
obvious deductions. A considerable proportion will
return to domestic life when their men come back. A
further large number will fall out automatically with the
closing of the munition factories. A still further number
will fall out from industrial or physical incompetence.^
But, when all allowances have been made, a large number
of women, greatly in excess of the number of male
dilutees, will not only elect to stay in industry but have
acquired the requisite skill and experience : will, if put
to it, compete on the labour market.

The outside public is prone to imagine that the work
done by women during the war has been either purely

' This figure does not include the number of women who have taken up miscellaneous
occupations. I am here dealing only with woman's work as it may affect organised
labour.

' By October 19 19 these eventualities had all three been realised.

INFLUENCE OF THE WAR ON LABOUR 255

unskilled or repetitive. This is true to a large extent ;
but it is not the whole truth. It was, I think, strictly
true down to the spring of 19 17. But as the military
demands for men of fighting age grew more exacting,
large numbers of men, who, in the first instance, came
under the " Schedule of Protected Occupations," were
released to the Army, whilst the events of March, April,
and May 191 8 strained the nation's resources of skilled
men to a dangerous limit. The consequence has been
that woman has undertaken skilled work previously
assumed to be beyond her capacity. Not only has she
undertaken it ; she has succeeded. So much so, indeed,
that it is now difficult to believe the number of delicate
and highly trained operations she performs. The progress
of women in these years towards industrial efficiency is of
historic interest. It may be well, therefore, briefly to
review the stages. In 1 9 1 5 women did little more than
labourer's work, fetching and carrying for the men. In
1 9 1 6 they gradually filled the places of men who were
called to the colours or voluntarily enlisted, the latter in
far larger numbers than is generally realised. It then
became evident that, as the war would be prolonged, we
would be compelled to rely upon woman's labour, both
to produce munitions and continue our economic pro-
cesses. There was nothing for it but intensive instruction
in one form or another. The object aimed at was to
train a woman rapidly to perform one operation, of the
many involved in the production of a particular part or
piece. She was required to become a specialist in this
one thing. Incidentally, we may remark that the average
apprentice is not taught much more than this and takes
longer to acquire it. But an intelligent worker, man or
woman, would not stop there. She has eyes ; she talks
with others ; they compare notes. Often she gets
transferred to another job ; the skill gained in one
operation can with little modification be applied to
another. In the end, partly by training, partly by
observation, partly by atmosphere, many thousands of

2 56 NATIONAL GUILDS AND THE STATE

women have become reasonably competent industrialists,
many more thousands have become adepts at one, two
or three operations.

Thus, by the autumn of 191 7, we find that women
had travelled far from their industrial starting-point of
19 15. She had conquered both heavy and light work.
In several factories, after a few months' training, she
had made gauges accurate to within one-quarter of a
thousandth of an inch (-00025) ; she has been known to
unload coal wagons, shifting 20 tons per woman per
day. So far back as June 1917 came this official
announcement :

Petrol Engines. — Messrs. R. A. Lister & Co., Ltd. (Durs-
ley), have women engine-testing, tin-smithing, fitting, erecting
and viewing in connection with petrol engines.

A petrol engine, particularly for aircraft, is a most
complex and delicate piece of mechanism. When
women have performed, under skilled supervision, all
the subdivided processes here enumerated, there is little
or not much left for a skilled engineer to do after
them.

In 1917 that was regarded as a notable performance.
A year later, from the same official source (week ending
August 10, 191 8), I read:

Tool-setting. — In the factory of Messrs. White & Poppe,
Limited, Coventry, making brass fuses, Nos. 106 and 80, Mark II.,
21 women are employed on Cleveland automatic machines and
16 on Brown and Sharpe's automatic machines. They work to
limits averaging four one-thousandths of an inch on the outside
diameter and two one -thousandths on the inside.

Gauges. — At the works of the Telephone and Microphone
Company, Sutton, two-thirds of the hands are women, and, apart
from the proprietor and a discharged soldier, only three are skilled
men. On screw-gauges, two women do the entire work, including
hardening by the cyanide process and final correction. They work
to limits as close as half a ten-thousandth of an inch.

Constructional Engineering. — At the works of J. West-
wood & Co., Ltd., Millwall, two years ago, no woman was

INFLUENCE OF THE WAR ON LABOUR 257

employed. Now women are engaged on unusually heavy work.
Four women, taking the place of three men, bend sheets of one-
eighth inch metal, each weighing about 2 cwt. on hydraulic
presses.

Then follows a list of other heavy tasks. The report
ends :

The women are contented, in spite of the fact that they have to
work in open-sided sheds. They give satisfaction to their em-
ployers.

Similar reports follow showing the work done by
women on ammunition and limber wagons, optical
instruments, electric lamps, machine belting. The last
note reads :

During the past ten months nearly 100 girls have been trans-
ferred from the preliminary course at the York Technical School
to the Government Instructional Factory, Birmingham.

The extent to which woman has invaded industry
can be dimly estimated by a glance at the Catalogue of
the Exhibition of Samples of Women's Work, at the
Whitworth Institute, Manchester. Fifteen groups of
exhibits covering engines of every description, guns and
components, small arms, gauges, drills, cutters, tool-room
work, aircraft fittings (metal and wood), projectiles,
general engineering, including machine tool parts, optical
munitions and glassware, surgical and chemical glassware.
This Catalogue reeks with most significant comments.
I confine myself to only one, which every engineer will
appreciate :

In the works where these articles are manufactured, the extent
to which female labour has been utilised on non-repetition work
of very high-class may be gauged by the following facts. The
milling machines are operated by 24 girls under the supervision
of 2 skilled men. There are 23 girls on Capstan lathes with 2
skilled men supervising. Of six shaping machines, five are oper-
ated by girls and the other by a man who gives the girls any assistance
they may need. Eight girls are working Universal grinders, all

S

258 NATIONAL GUILDS AND THE STATE

under the supervision of one man. There are six girls operating
engraving machines, and these are supervised by a woman. Four-
teen girls are wrorking centre lathes, doing screw-cutting, both
internal and external. Their lathes are situated alternately with
lathes operated by skilled men, who give the girls such attention
as they need. In the tool-room a girl works a Universal grinder,
another a Universal miller, while a female tool-fitter backs all
formed cutters by hand. There are 1 3 girls fitting gun-sights at
the bench, doing all work except that demanding the highest degree
of skill, which is left to experienced male fitters.

Before coming to the medical and social aspects of
this new factor in industry, there is one feature of great
significance. Since woman generally has not the physical
strength of man, special machines have been devised to
supplement her work — lifting and carrying gear and
the like. Nor must we omit from our calculations the
enormous progress made during the war in automatic
machinery, ingenious, of course, but steadily achieving
simplicity of operation and as near as possible " fool-
proof." Whether woman remains in industry or leaves
it, all these mechanical aids to physical disability can
still be applied and developed.

I have heard it stated many times that the women
have worked in the munition factories more intensively
than the men. It is probably true ; but we must be
careful not to draw the wrong deductions. Historically
considered, the men are in their second industrial wind ;
they have a tradition, not of laziness (although under
the wage -system that would be comprehensible), but
of unconscious adaptation to the length of the course.
The women are novices ; they have worked under the
excitement of a war, in which their men-folk were
deadlily engaged. Over a long period of years (the
only test of endurance) I think it is certain that the
men would outpace the women both in application and
output. But it is profoundly important to ascertain the
physical effects upon women of industrial strain ; for
not only is it certain that, whatever their endurance,
they are physically weaker than men, in addition we

INFLUENCE OF THE WAR ON LABOUR 259

must bring into the count their special physiological
functions.

It is, as yet, much too early to reach any definite
conclusion ; we shall not for years be able to estimate
the physical influence of the workshop upon the vitality
and health of children born in these conditions, whilst
the immediate effects upon the women's physique are
still unmeasured. These facts, so far as they have been
collated, will be found in the Final Report on Industrial
Health and Efficiency by the Health of Munition
Workers' Committee, the result of an exhaustive and
sympathetic inquiry into the health conditions of munition
workers.^

Without more ado, I turn to the section on fatigue,
which the Committee defines as " the sum of the results
of activity which show themselves in a diminished capacity
for doing work." The whole of this section is of immense
importance to industrial students : I am here concerned
with fatigue as it affects the women workers. We have
the results of two medical inquiries, one in which 1326
women and girls were examined, and the second, 11 83.
The results of these inquiries are thus tabulated :

Number of workers
examined.

Class A.
Healthy.

Class B.
Some fatigue
or ill-health.

Class C.

Marked fatigue

or ill-health.

Inquiry No. i, 1326
Inquiry No. 2, 1183

763
= 57-5 ?" cent

692
= 58-5 per cent

4SI

= 34. per cent

425

= 35'8 per cent

112

= 8-5 per cent

66
= 5-7 per cent

Upon this, the Committee remarks :

The total proportion of women exhibiting definite signs of
fatigue is about 40 per cent of all cases. But this percentage does
not represent the full burden of fatigue, for the following reasons :
(a) much early fatigue is latent and objectively unrecognisable ;
(i) the women most seriously aiFected tend to drop out of factory

^ Cd. 9065. Price, 28. net.

2 6o NATIONAL GUILDS AND THE STATE

life before they have served for any long period, and therefore are
not included ; (f) w^omen knowing themselves to be fatigued were
not willing in all cases to subject themselves to examination ; and
{d) the examination was necessarily superficial and incomplete,
and only such as could detect definite and obvious fatigue, amount-
ing almost to sickness.

These are sufficiently grave findings, but, if an
amateur might intervene, I would like to add that
as nine months elapsed between the two inquiries, it
is not unreasonable to infer that the women in Class C
had probably dropped out in considerable numbers.
It will be observed that, in the nine months, the per-
centage of Class B rose from 34 per cent to 3j:"8. It
would probably have risen much higher, but, during
the intervening period, the hours of work had been
shortened, overtime greatly reduced and only spasmodic,
Sunday labour abolished, and factory conditions generally
improved. It is evident that the physical strain on
women, even so far as it could be outwardly observed,
was felt far more acutely than it would have been by the
men. Nor do I doubt that in, say, ten years, Class B
would have drawn heavily upon Class A. The ailments
most frequently observed were indigestion, serious
dental decay, nervous irritability, headache, anaemia,
and disorders of menstruation. Something like a quarter
of the women workers examined failed in one respect or
another ; 7 per cent had throat trouble ; 8 per cent
suffered from eye-strain ; 9 per cent from swollen feet.

The conclusion I draw from the available facts
relating to female dilution is that, however enticing
war wages may have been, or however necessary, due
to the increased cost of living, and disregarding sex-
psychology, about which I know nothing, the generality
of women will speedily discover that the money-wage is
an altogether inadequate return for the physical strain
and waste involved. Granting that there are many
thousands of women who are physically equal to the
effort and enjoy the financial independence, it is a reason-

INFLUENCE OF THE WAR ON LABOUR 261

able generalisation that women will finally only resort to
industry (I am not considering the miscellaneous occupa-
tions) as a final resort to gain their livelihood. The
attitude of the men in such cases will be, I apprehend,
not proscription, but an insistence upon a standard of
skill, with equal pay for equal work. Further, if women
are to be permitted only to enter certain trades, to which
they are physically equal, it is the logic of sex-equality
that men should be medically graded also. But that
carries us far afield.

There is an economic side to this particular problem
calling for some comment. In my earlier chapters I
considered the status of the consumer in relation (a)
to the producer, and {b) to the State. I argued for
the dominance of the producer and rejected the State
as the special protector of the consumer. But the
woman is par excellence the agent of the consumer ;
she it is who disburses the larger proportion both of
salaries and wages ; it is she who counts with care the
pence and shillings, seeking, however unsuccessfully,
the best bargains, the best quality for the price ; she
it is who rations the home in foodstuffs, clothes, fuel
and lighting. Broadly stated, the guidance and control
of consumption is woman's function. That is only
another way of saying that she is the essential element
in the greatest of all the economic functions — home-
building. We may dismiss with a shrug the early
Victorian conception of " woman's sphere," of the
monogamous harem, so dear to our pious grandparents,
nor need we waste time and space upon the sentimental-
isms that always crowd in upon this question. I know
nothing about them and care less. But the business of
home-building is the one vital consideration in every
sane national economy. Let the family be composed
how you will, with or without the sanction of the Church,
be your moral code what it may, the fundamental fact
remains that mankind produces wealth that it may live
in comfort and with the amenities that flower out of

262 NATIONAL GUILDS AND THE STATE

tradition and culture. Where we live, that is our home ;
how we live is reflected in our home ; the standard of
life is not measured in money but in home expenditure.
The National Guildsman and the Socialist are both
agreed that Capitalism disrupts and destroys the home.
Let the moralist if he can lay down an ethical code for
family life — he has never yet succeeded — whatever the
code, the home remains the cardinal fact of civilised life.
The active agent for the home is undoubtedly the woman.
If we reflect, we see that probably not less than three-
quarters of every income passes through the woman's
purse — in sum-total not less than ;^2,ooo,ooo,ooo
annually. Now that is an economic fact of the first
magnitude. If we measure it, not in terms of money,
but of housing, food, clothing, heat and light, child-life
and child-bearing, whatever the foundation of the home,
woman's function is primarily to arrange and finance
consumption. It has always been a working formula of
mine, that even if women enter paid occupations, they
should be directly related to consumption rather than to
the more distinctively productive processes.

Viewed in the cold light of economic reason, it would
therefore seem {a) that woman in productive industry
is sternly limited, in her industrial capacity, by physical
disabilities, whilst (J?) by nature and in harmony with
the social organisation, she is functionally adapted to
motive and control the consumptive activities. But
political economy, whilst of great value in pointing
tendencies, is a bad master in practical detail. Thus,
we might argue from the facts that it is economically
desirable to exclude women from industrial production,
but political principles might dictate another course of
action. Having regard to the pre-eminent importance of
home-building, a case could be made out for restricting
women to the work that hinges upon it. Wisdom and
experience, however, teach the value of liberty, appHcable
alike to man and woman. We shall solve this pro-
blem by reason and not by law ; by moral suasion and

INFLUENCE OF THE WAR ON LABOUR 263

not by proscription ; by the interplay of citizenship with
the autonomous industries, gradually developing into
National Guilds ; above all, by the ever-increasing
consideration that the enfranchised workers attach to
the home. Even under the wage-system it would repay
the men twice over to pay the women their existing
wages to desert the factory and workshop for the home
or the occupations that radiate from the home.

We can now draw certain inferences from the facts of
male and female dilution. One conclusion is of impressive
and outstanding importance, practically swallowing up
the others. It is this : the crafts and mysteries, associated
in our minds with the various Trade Unions, as crafts
are not monopolies, and as " mysteries " are an open
book, no longer mysterious. We have seen one craft
after another invaded and largely conquered by the war
dilutees ; we have seen the mechanical genius of the
country, under the relentless pressure of the war, evolving
automata of amazing ingenuity ; we have seen middle-
aged men and girls learning in a few months various
mechanical operations, which, prior to 19 14, were
reserved for men who had spent years as apprentices.
It is important to be precise : there remain uninvaded
many operations which still require skill and experience,
pivotal jobs upon which have depended the others calling
for less skill and practically no experience. And skill
is still skill, even if quickly developed under the stimulus
of danger. Nevertheless, the glamour of the crafts has
been largely dissipated in these last years. One could
almost safely affirm that we could, at the present moment,
dispense with three-quarters of our skilled workers and
in a short time equal the present output. Unless,
therefore, the craft unions seriously take stock of their
industrial position, if they attempt any policy of exclusive-
ness, they are undoubtedly riding for a fall. The moral
is surely so clear that he who runs may read. If Labour
is to win through to a monopoly of labour, the foundation
of National Guilds, it will not be by a reversion to pre-war

264 NATIONAL GUILDS AND THE STATE

conditions, but by a large policy of inclusion, a realisation
of the stupendous implications of the miracles accom-
plished, and, therefore, of the recognition and admission
to the fold of every worker, man or woman. Unless this
be done, and done quickly, amalgamation will come too
late to accomplish soUdarity, and we shall be plunged
into fratricidal strife. Skill is still skill ; but it is now
no protection in itself. That protection is found in the
organisation of the workers as a class, in appropriate
industrial groups ; but, first and last, based on a real
and not an artificial monopoly of labour.

V. The Menace or Unemployment

The second danger confronting organised Labour
is post-war unemployment — the tedious, exasperating,
cumbrous return to civil life of millions of soldiers, a
large proportion moved by new ideas, impatient of con-
ventions, men who have cast out fear, no longer sheep
easily sheared. As their unemployment insurances melt
in the flux of time, we shall witness a fateful race between
their methodical absorption into industry and the perils of
acute discontent in men inured to death and destruction.^
In the previous section we have seen that organised
Labour must embrace the new army of dilutees ; the
old army of soldiers is a problem demanding equal
statecraft. The easy optimism springing from war's
artificial prosperity, now feeding on grandiose schemes of
reconstruction, can hardly be sustained when faced with
the harsh reality of constant delays, and innumerable
misfits in the process of demobihsation. If we grant
the possibility of a spurt in production to restore the
waste and losses of war, a reaction is inevitable, unless
we pursue peace as we did war, by providing economic

1 By April 19 19 the number of men and women receiving unemployed donation
benefits was returned at 1,200,000. By September of the same year the number fell
to about 500,000. It must be remembered, however, that natural demand in the
intervening months had been transformed into effective demand. It is premature for
at least a decade to estimate the economic effects of the war.

INFLUENCE OF THE WAR ON LABOUR 265

instead of artificial credit, either as a nation or in industrial
groups, with the consent and co-operation of Labour.
That depends upon Labour's growing control of pro-
duction ; but the control tends to diminish precisely as
Labour disregards the meaning of dilution and the
danger of unabsorbed labour.

In normal conditions, unemployment is labour in
reserve, partly seasonal, partly casual ; the unemploy-
ment that now threatens us is entirely casual, consisting
of men who for years have pursued the profession of
arms and are now compelled to seek another trade. It,
therefore, becomes a gigantic task of decasualisation.

The question naturally arises whether there is any
principle which we may apply to the solution of un-
employment. Broadly stated there are two. Since all
are agreed that unemployment is no crime, it follows
that the unemployed are entitled to maintenance. One
school would throw the cost upon the community ;
the other upon the industry. The first recognises the
validity of the wage-system and therefore assumes that,
if an employer has no market for the reserve labour
commodity, he is under no obligation to maintain it.
This granted, the logic of the situation throws the
ultimate responsibility of maintaining the unemployed
upon the community. To this school, unemployment
is a visitation of God, a public calamity and a social
responsibility. The second school denies the validity
of the wage-system, contends that unemployment is an
essential function in capitalist industry, and is therefore
a capitalist liability. For, just as capitalists buy reserves
of raw material, and since labour is to them a commodity
in the same category as raw material, so ought they to
maintain their labour reserves. The first school replies
that, even if it admits the fundamental contention that
the employers should maintain their own labour reserve,
it is impracticable, because a large proportion of the
unemployed is composed of casual labour and a further
proportion is unemployable. The second school retorts

266 NATIONAL GUILDS AND THE STATE

that it is our urgent business to decasualise all casual
labour by attaching it, definitely and formally, to an
industry. As for the unemployable, that is hereditas
damnosa from the capitalist system, a social burden, to
be treated as a disease. The problem is further compli-
cated by Part II. of the Insurance Act, which, in the
selected trades, practically divides responsibility between
the employers, the trade unions, and the State.

We cannot, however, adopt either of these principles
without taking into consideration the role played by the
trade unions in regard to unemployment. For a century
or more the main function of the trade unions has been
to maintain the labour reserves. This was recognised
long before the unions began to bargain with the
employers for higher wages. But as the unions, in
earlier days, were manned by the more highly-paid or
" skilled " workmen, the social result of unemployment
was that, in trade depressions, one class fell back upon
their trade-organisations for support, whilst the other
found itself unwillingly entangled in the Poor Law. It
is well within the recollection of the middle-aged of
to-day that not many years ago bona fide unemployed
were automatically disfranchised, becoming " paupers "
through the ordinary working of the Poor Law. But
whatever the position, to-day or yesterday, the trade
unions have become legally recognised as the natural
protectors of the unemployed. It is not only because
they are organised for that purpose — a good reason in
itself — but because unemployment in a dozen ways has
a vital bearing upon wage-rates and conditions. To
remove the function of unemployed maintenance from
the trade unions would be therefore to add to industrial
embarrassments when the purpose should be to simplify
them. In so far as the community supports unemploy-
ment through its own machinery, acting in a civic and
not an industrial capacity, it runs counter to the_ scope
and function of trade unionism, robs trade unionism of
one of its most powerful appeals to its members, and

INFLUENCE OF THE WAR ON LABOUR 267

sets in motion definitely antisocial forces. Curiously
enough, it is this civic solution that more generally
appeals to trade-unionists. That is one of the anomalies
created when the political tail wags the industrial dog.

Those of us who reject the commodity valuation of
labour, whose analysis of the wage-system has led
them to the conclusion that wage-abolition can only
be accomplished through Labour's monopoly of labour,
are clear that unemployment is an economic process
which can only yield to an economic solution. This
economic solution is found, not in civic action, but in
the industrial processes, one of which is the operation
of the labour reserve as a wage regulator or, on due
occasion, as a market support. It logically follows (a)
that the industry must maintain its own labour reserve,
and {b) that the maintenance must come through the
trade unions. There is another inference equally
important : if the unemployed must claim maintenance
upon an industry, they must be definitely affiliated to
an industry, by service over a period of time and by
formal registration. I know of no other way to effect
decasualisation. Whatever training the State may give
either the unemployed or unemployable, it remains true
that they are industrial Ishmaelites until they join the
fellowship of a trade or occupation. Once in the fold,
their claim to support, subject to good conduct, is in
principle equal to all the others, be they employers, the
salariat, or their fellow- workers.

The demobilisation of the army is obviously a civic
responsibility, because the soldier is a civil servant, set
to a task that is national and not industrial. But the
principle here stated clearly applies. So far as the State
is the employer of the soldier, it is the duty of the State
to maintain him until he is definitely transferred to
industry. The soldier " belongs " to the army until he
" belongs " to his industry.

When in 1 9 1 2 and again in 1917^1 argued that the

1 National Guilds, p. 83 e< seq. ; Guild Principles in War and Peace, p. 121 et seq.

268 NATIONAL GUILDS AND THE STATE

cost of unemployment should fall upon the industry and
not upon the community, I was not only motived by the
historical fact that the trade unions had met out of wages
the charges involved in unemployment, like a dog eating
its own tail, but also by the Guild argument that every
Guildsman must be entitled to maintenance in sickness,
in old age, as well as in unemployment. These are
obviously burdens to be properly borne by the future
National Guilds, but burdens to be taken over from the
developed industry and not from the State. It is the
logic of the theory ; it is the logic of the facts. Litde did
I dream in 19 12 that war would bring the principle into
operation within five years. In 19 17, even as I was
writing and unknown to me, the Cotton Control Board
was crystallising in action what I had argued in theory.
The " Rota " system of unemployment, in the textile
trades, did organised Labour but know it, constitutes
one of the most valuable precedents created by the war.
I propose, therefore, briefly to outline the story for future
guidance.

The shortage of raw cotton due to the loss of shipping,
coupled with the industrial unsettlement caused by the
war, compelled the leaders of the cotton industry, both
masters and men, to face the problem of unemployment
from a new standpoint. The Cotton Control Board had
to ration the mills and to Hcense the percentage of spindles
to be worked week by week. This percentage varied
according to war requirements or to the quality of the
cotton spun. Thus spindles were licensed up to 80 per
cent, S5^ hours per week, if engaged entirely on
Egyptian, Sea Island, or Surat cotton. If, however, it
was American cotton or other growths, they must only
work up to 50 per cent, at 40 hours per week. These
variations naturally affected employment, spinners and
weavers being "played off" as circumstances dictated.
In former years, the unemployed would have _ taken
benefits from their unions or " clemmed." Obviously,
this was a new situation, which was met by an arrange-

INFLUENCE OF THE WAR ON LABOUR 269

ment under which the spinners and weavers took turns
of unemployment in rotation. They were maintained
during unemployment out of dues levied upon running
spindles or looms, a fund of over ;^2, 000,000 being raised
in this way and distributed amongst the unemployed.
In September 1917 the rates of unemployment pay
amongst spinners were : adult men, 25s., adult women,
15s., young people, full time, 12s., young people, half
time, 6s. The weaving rates were similar. In the
regulations I observe that the term " young people "
must be interpreted broadly : " The question of age
must not be the sole determining factor, but the actual
work and wages earned and family circumstances must
be taken into consideration." In August 191 8 the
pay was increased from 25s. to 30s. and the others in
proportion. In July 19 18 the rotation system, contrary
to the wishes of the unions, was withdrawn, but the
unemployed payments were maintained to those " con-
tinuously played off." We need not enter into the
reasons for the change from the rota to the continuously
unemployed ; it does not affect the main point that the
unemployed, owing to the Cotton Board's restrictions,
were maintained by the industry.

Valuable though the adoption of the principle un-
doubtedly is. Labour would be justified in regarding
it askance unless to the principle of trade-liability for
unemployment were added the equally fundamental
principle of Labour's control of labour. In discussing
this problem, Mr. Cole wisely insisted that unemployed
payments should be made through the trade unions.
This is essential ; for, unless organised Labour becomes
the medium of pay, it would leave the employers in
control of a vital factor in the trade-union organisation.
This was recognised by the Cotton Control Board, who
directed that " payments both to unionists and non-
unionists should be made wherever possible at trade-
union offices. Where any employer is unaware of the
existence of any local union, at which the workpeople

270 NATIONAL GUILDS AND THE STATE

whom he is temporarily discharging can receive payment,
he should communicate with the secretary of the nearest
joint committee, employers' association, or trade union,
and if it is found that there is no local union which can
undertake the work, the Control Board are prepared to
make special arrangements." Thus, however partial or
restricted, we have in this great industrial experiment
the recognition of two essential principles : (a) that the
industry is properly liable for the maintenance of its own
unemployed ; {h) that the administration of unemployed
benefits is the function of the trade union.

The premature adoption of the principle, however,
brings more than one danger in its train. Unless the
trade unions are strong enough to maintain at least the
former wage rates, it is certain that the employers would
exploit the concession by bargaining for a wage reduction
proportionate to the cost of unemployed maintenance.
Some employers have already hinted as much. But I
do not think the trade unions need be unduly nervous ;
the textile unions have not been deterred from striking
for an increase of 40 per cent merely because their
unemployed have drawn ^£2,000,000 direct from the
industry. A greater danger is the coming attempt to
include the maintenance of the unemployed in a compre-
hensive agreement between Capital and Labour to
humanise whilst still continuing the wage system. " A
systematic application of the principle of security, "writes
one of our critics,^ " would involve no revolutionary
change in the organisation of industry. It would be,
indeed, merely the carrying out in the spirit of the social
contract implicit in the wages system. Until the wage
earner has been given a position of economic security
which nothing but his own fault can destroy, the wages
system as a system has not been tried. For the basis
of it surely is this : the employer takes the risks of
industrial enterprise and the profits as reward, the
workman is paid a regular wage without any share in

' The Round Table, December 1918, p. 161.

INFLUENCE OF THE WAR ON LABOUR 271

profits because he is not expected to share the risks."
So that the " wages system may be tried," so that the
employer may take the risks and the profits, so that
quantitative production may restore to paper money its
old purchasing power ; in short, so that capitalism may
yet flourish. Labour will be asked to protract the old
system in return for " security." I do not know whether
this " security " is to be at the expense of the State or
the industry — probably the former — but it is evident
that the capitalist leaders are feeling their way towards
a new wage charter. They will ask Labour to accept
it at the psychological moment when Labour is weakest,
when its percentage of unemployment is highest, when
it is distracted by financial stringency, deliberately
contrived by the banking interests. Under such duress,
the older Labour leaders, trained in the school of wagery,
may plume themselves upon their bargain. But, as we
have seen, there are younger men, the new shop-stewards
and their congeners, who, in their turn, are feeling their
way to a new security rooted in industrial control ; who
are already suspicious of the " security " guaranteed by
employers who take " risks."

IV

THE PROFITEER

A SIGNIFICANT change in the public mentality is seen
in the sinister meaning now attached to the word
" profiteer." When first coined, profiteer meant one
who lives by profits ; that is an occupation dependent
upon the continuation of the wage-system. In recent
years profiteer has come to mean one who exacts profits
that cannot be defended as equitable. It is assumed
that reasonable profits remain equitable ; that he who
is content with profits so small that they do not become
an exorbitant charge upon the consumer is merely
taking what is due to him ; that he is not a profiteer,
which has become a term of reproach. The public
conscience, with characteristic inconsistency, now con-
demns profits, not in principle but in degree. It says
in effect : " You may levy profits, but not beyond a
reasonable limit ; you must do it in such a way that
attention is not too palpably drawn to your operations ;
for Heaven's sake do not be found out."

The logic of this is that sneak thieving is defensible
whilst highway robbery is a crime. It is a point we may
leave to the social philosophers, who will doubtless
draw nice distinctions between moderate and excessive
drinking. At what stage is a man a drunkard .'' At
what stage a profiteer ?

The writer in the Round Table, quoted in my last
chapter, is more logical than the public conscience. He
is satisfied that the wage-system has not yet had a fair

27a

THE PROFITEER 273

trial ; that the wage-earner must have economic security ;
that the social contract implicit in the wage-system confers
upon the employer the profits as a reward for the risks.
But so far as there are risks there must be insecurity ; if
insecurity, then upon what fund can the wage-earner
rely for economic security ? We are not informed why
there should be risks, nor why it should be ordained that
the employer should undertake them. If it be a public
duty to accept risks, then let the industry, as a whole,
accept responsibility. The truth of it is that the employer
protects his position by large and untenable assertions
as to the risks he runs ; these risks constitute his claim,
for it is evident that, where there is no risk, the problem
of credit is reduced to its simplest form, so easy of
manipulation that organised Labour could carry on with
ease and certainty. The employer wants the risks
because he wants large profits ; his defence of large
profits is rooted in the speculative nature of his under-
taking. The risk, once reduced to practical zero, no
longer serves as the employer's justification, who must
then fall back upon the functional value of his own
personal activities. Apart from the risks, which nobody
asks him to accept, the employer's only possible function
is as an organiser, as a directive element in production
or distribution, as a technical expert. When we have
reached this stage, payment by profits or by results
becomes obviously inappropriate ; the employer joins
the salariat. This is precisely what has happened under
the joint-stock system. It is no longer the employer
who takes the risks ; he has long since passed them on
to his company of shareholders. The writer in the
Round Table is a generation too late ; he does not mean
the employer ; he means the capitalist. We have long
since discovered that payment by profits is a clumsy and
inequitable method of remuneration. Administratively
considered, the profiteer has now no status. Qua profiteer
he has no function ; he is an economic Ishmaelite.

We shall see this more clearly if we consider those

274 NATIONAL GUILDS AND THE STATE

who live on profits in the distributive trades. In his
formal capacity, the grocer or draper is a profiteer ; he
looks to his profit for his living. Actually, however,
his function is not to win profits but to distribute com-
modities. The prices of these commodities are estimated
in such wise that he may secure a surplus of revenue over
expenditure. This surplus is termed a profit ; in reality,
it is a rough-and-ready means of remuneration. His
customers pay him a percentage over cost for services
rendered. No doubt, he takes the risk of loss on his
trading ; but it is a measurable risk. The multiple shop
has arrived to eliminate that risk. In the multiple shop,
the trader is transformed into a servant and joins the
salariat, just as the manufacturer becomes a servant to
his joint-stock company. The function of distribution
persists ; the risk is provided against ; the small trader
ceases, in fact, to be a profiteer, and only justifies his
existence by functioning as a competent agent of distri-
bution. Even if he continue master of his business, he
still remains the servant of his customers on the one hand,
and of the wholesaler on the other hand. The number
of his customers and the prices charged are the measure
of the credit he obtains from the wholesaler. The shop,
as a going concern, is generally only solvent by taking
the stock into account. The grocer in his own person
is a profiteer in form ; in reality he is a servant ; so
much a servant that he cannot now guarantee the quality
of his goods. He may say that he obtains them from
Smith & Co., whose reputation for quality is unrivalled ;
but if Smith & Co. decide to advertise at the expense
of quality, our grocer is impotent. He is an inconsider-
able but useful cog-wheel in the vast machinery of supply
and demand. In the local sense, he is an employer ; in
the larger sense, he is an employee, who would doubtless
welcome any form of security. As often as not, he has
taken trading risks to avoid the greater and more degrad-
ing risks inherent in wage-servitude.

The inference is that the individual profiteer is now

THE PROFITEER 275

merged into an impersonal system of capitalism, which
he must serve as faithfully as the small trader serves his
creditors. He is entangled in a financial network from
which he seldom escapes into comparative independence.
It is this capitalism, as a system, that is now considerate
enough to take the risks and kind enough to seize the
profits. The financial situation created by the war is
the immediate preoccupation of the leaders and thinkers
of the system. The financial policy to be adopted, with
the required degree of organised Labour's acquiescence,
will indubitably colour and influence Western Civilisation
for a generation or more. It is of the first importance,
therefore, that the leaders of Labour should grasp the
full significance of the capitalist proposals.

The re-adaptation of the industrial machine to civil
purposes is obviously the first consideration. To that
end, credit must be arranged on a large scale. But our
credit is already pledged beyond reckoning to pay our
war-debts. The question, therefore, is whether the old
system of credit can stand the added strain of re-adapta-
tion, or whether a new system must be evolved. But a
more searching question must have priority. If finance
and capital have, as they claim, been responsible for
industrial policy in pre-war days, what have they to say
for their stewardship .'' It is common ground that in
1 9 14 capitalist policy had driven Labour into active and
bitter opposition. There were strikes and rumours of
strikes ; Capital, in its forcible-feeble way, was threaten-
ing to abdicate ; there was an atmosphere of disquiet
and foreboding. That was bad enough ; but how had
finance and capital applied their powers ? Had they
put the forces at their disposal to the best economic use .''
In 1 9 1 3, quoting from a preliminary report of the Census
of Production, I wrote :

" There are probably fifteen million employees
engaged in wealth production or wealth distribution.
But we find from this table that less than seven millions
are directly engaged in production. It will be necessary

276 NATIONAL GUILDS AND THE STATE

to inquire how far Guild organisation can economise on
distribution. If we put the cost of production at lOO,
it will be found that the ultimate cost to the consumer
varies between 140 and 220." ^

From the same source it was found that, even in
production, the administrative personnel was excessive
— foremen, clerks, and the like. Thus, in the building
trade, there were 37,000 ; there were 14,000 in iron
and steel factories ; in the shipbuilding yards, 9000 ;
in the engineering shops, 39,000 ; clothing, 50,000 ;
boots and shoes, 9000 ; printing and bookbinding,
16,000. Altogether, in the productive trades, there was
an army of 220,000 overseers, foremen, and clerks.
Thus, when finance and capital claim to be industrial
leaders, we are entitled to examine their credentials with
critical eyes. If to these facts we add wretched housing
accommodation and a low standard of life amongst the
mass of the population, we may remark that, in the past,
finance and capital have little with which to plume
themselves. Accordingly, it is but prudent to receive
their proposals with considerable caution.

" Finance," says Dr. Ellis T. Powell, " is collated
human experience, applied to the aggregation of capital
and its scientific diffusion and distribution in such a
manner as to produce the maximum result with the
minimum of risk. Finance and capital are two distinct
things. Capital is the blood, finance the brain. Capital
is the mechanic, finance the craftsman." ^

After such a pronouncement, I naturally look with
anxiety to what Finance, in its role of brains, has to
say about our present difficulties. The Committee on
Currency and Foreign Exchanges, being composed of
finance pur sang, under the Chairmanship of Lord
Cunliffe, Governor of the Bank of England, has issued
its report, from which I gather that " it will be clear

' National Guilds, p. 127 : "A Survey of the Material Factors."
' The Financial Review of Reviews, December 1918 : "Future of International
Finance," by Ellis T. Powell, LL.B., D.Sc.

THE PROFITEER 277

that the conditions necessary to the maintenance of an
effective gold standard in this country no longer exist,
and it is imperative that they should be restored without
delay. . . . The uncertainty of the monetary situation
will handicap our industry, our position as an inter-
national financial centre will suffer, and our general
commercial status in the eyes of the world will be
lowered." These guardians of gold billets are clearly
of opinion that there's nothing like leather. Nor do
they tell us — an oversight, no doubt — what creditors
stand to gain by reverting to dear pounds. But they are
not alone in wishing to return to the gold standard.
The Committee on the Provision of Financial Facilities
after the War, presided over by Sir R. Vassar-Smith,
who is not unconnected, I think, with a great banking
institution, also reports :

" It is essential for the reconstitution of industry and
commerce to impose restrictions as soon as possible upon
the creation of additional credit by the restoration of an
effective gold standard. The Committee accordingly
recommend the cessation of State-borrowing as early as
possible, all available money being required for the
financing of commerce and industry."

In plain terms, the State must not borrow for re-
adaptation, however urgent ; that must be left to the
banks, with their dominant gold standard. I begin to
wonder whether this yellow metal is some strange
talisman whose touch kills poverty as the King's hand
scurvy. Some property in it escapes my search with
tantalising iteration. Restore the gold standard, and,
hey presto 1 commerce and industry thrive ; let mere
State credit continue, then " our general commercial
status, in the eyes of the world, will be lowered." It
is a solemn thought. Distracted with doubts and fears,
I return to Dr. Ellis Powell, who, as editor of the
Financial News, and author of The Evolution of the
Money Market, should know a thing or two. Can it be
possible that Finance, the brains, the craftsman, " the

278 NATIONAL GUILDS AND THE STATE

King-power, the supreme vitalising force of the future "
speaks with two voices ? Says Dr. Powell : " Even
now the interim report of Lord CunlifFe's committee
speaks of the re-establishment of the gold standard,
though the proposition is almost as fatuous as a suggested
restoration of the Heptarchy. . . . Even now we are
not awake to the deadly fact that a regenerated world
cannot measure its multitudinous transactions in a
commodity which is subject to incessant and catastrophic
variations in value. Half our social troubles for three
centuries, and practically all our industrial unrest for
forty years, have been the direct result of a ' standard '
consisting of a fluctuating commodity, existent only in a
limited quantity. We cannot allow this malaise to exert,
over the arena of international business and social
relations, the same disturbing and mischievous influence
which it has exercised here."

One welcomes such a declaration from so distin-
guished a writer ; but has he not destroyed his own
thesis .'' How can he reconcile his statement that
finance is " collated human experience," and the rest,
when the financial leaders emphatically demand some-
thing that Dr Powell contemptuously dismisses as
" fatuous," and elsewhere as a " fetish " .'' I am afraid
the plain man will conclude that, however golden its
heart, the financial Colossus has feet of clay. As for
the alleged " brains "...

The war has but brought nearer its culmination a
movement, or, rather, a tendency, to establish function
as a definite and dominant factor in our social and
economic life. It is in function that rights will be
established ; it is around function — the philosophic
" thing " of Senor de Maeztu and the " value " of Mr.
Robieson — that men and women will cluster, claiming
that, if they truly function, the world is theirs. Lombard
Street will soon discover that it cannot measure these
functions and their " multitudinous transactions " with
its ridiculous gold yard-stick. Lord CunlifFe and

The profiteer 279

Sir R. Vassar-Smith may jingle their gold coins on their
bank counters, or, with due ceremony, visit their bank
vaults to count the glittering contents. The world has
swept past such ju-ju worship : is rapidly discovering
other methods of estimating service, notably this : that
credit operations will be " based upon wealth, as a whole,
upon wealth in the real sense of the word — the means
of welfare — and not upon a metal which possesses unique
properties capable of utilisation in the world of art, but
is only a begetter of economic upheaval and tragedy in
the world of business."

In a society where function is undeveloped or inde-
terminate, it may well be that the money-changers
perform a service of some social value ; but as the
community progresses towards effective organisation,
function becomes defined, whilst wise organisation
gives it elbow-room and provides for its necessities.
The " risks," such as they are, are diffused through
the community in general and the organised industries
in particular. It is obvious that a great industry,
every member of which is at his allotted post, will
never submit to an external agency, such as finance,
in the guidance and valuation of its activities and pro-
ducts. The attempts now being made by Lombard
Street to recover the disappearing gold standard would
prove an expiring effort if organised Labour knew its
business and understood the true inwardness of credit.
The danger confronting us to-day is that Labour,
drugged with politics, may ignorantly acquiesce in a
reversion to financial methods which could easily be
rendered obsolete. It is the simple truth that a return
to the 1 9 14 gold standard would be a catastrophe. A
catastrophe not unwelcome to those who seek economic
revolution by catastrophic means.

Is it, we may ask,' something more than a coinci-
dence that we to-day witness two concurrent move-
ments, the one rejecting the commodity valuation of
labour, the other rejecting a commodity currency stan-

2 So NATIONAL GUILDS AND THE STATE

dard ? Both have something in common ; both are
striving to be released from the fetters of inanimate
measurement ; both aim at the enlargement of human
liberty ; both find themselves faced with a common
enemy. Beyond that the resemblance vanishes. The
individual profiteer wants credit that he may survive
as a profiteer ; the National Guildsman desires him to
merge into the ranks of the salariat, not only for his
own good, but that National Guilds may be the sooner
established. But we have seen that the individual
profiteer, qua profiteer, is already a misnomer : exists
only by virtue of his function in production or distri-
bution ; lives at the beck and call of capitalism : has
no future as a profiteer : must mount the functional
chariot or be crushed under its wheels. The problem,
therefore, of the profiteer can only be solved by the
solution of credit, because he lives on and by credit.
A fundamental change in our methods of credit, parti-
cularly if it take the form of group credit, obtained by
conscious group responsibility, effectually disposes of
the profiteer, so far as his own person is concerned,
and equally effectually destroys the foundation of the
capitalist system. When great industrial groups are
strong enough and wise enough to organise their own
credit, by lending or borrowing their own products,
or their equivalents. Finance will pipe to Labour in vain.
How far we are from that stage in economic develop-
ment I do not pretend to know. But we may find the
Achilles heel of finance in the definition of finance
already quoted, " collated human experience." Finance
cannot claim to have collated human experience until
it has called Labour into council. That is precisely
what it shrinks from, contending that finance is no
business of Labour's. When Labour decides that
credit is most emphatically its business. Finance may
proceed " to collate " further " human experience."
The collation will be a discovery ; the discovery will be
its death.

V
THE EQUITIES OF EXPROPRIATION

I. Social versus Commercial Values

If the tendencies described in the preceding chapters
mark a definite movement in industry, it is evident
that we are approaching a clash between the opposing
interests of Labour and Capital. A time must come
when Labour will either retire hurt or be compelled to
declare the principle upon which compensation shall
be paid to existing owners. The actual transfer of
capital will, of course, be arranged by the State, which,
on the Guild hypothesis, will act as trustee ; but obviously
the Guilds will not consent to operate plant, machinery
and the assets generally, if they are to be burdened with
undue debt.

Amongst the many economic effects of the rejection
of the labour commodity theory, two notable and
relevant changes emerge. The first is the transforma-
tion of the existing commercial system ; the second,
the destruction of every financial valuation based on
the control of the labour commodity. It follows that,
in -any settlement with the possessing classes, the
principle of compensation must be based on intrinsic
or social value, and not, as to-day, on commercial or
financial value. Our problem is not to ascertain the
capital value of some factory or business by its average
profits over a period of years, and then to estimate
its purchase price atj say, twenty years' purchase, based

281

2 82 NATIONAL GUILDS AND THE STATE

on five per cent interest, but to ascertain the cost of
the material in the labour units of the new industry,
plus whatever compassionate allowance public policy-
may dictate. For it is obvious that Guild principles
cannot assent to any valuation based on profits, which
are, ex hypothesi, eliminated ; nor on interest, which,
also ex hypothesis disappears with the commodity theory.
If the capitalists claim from the Community or the Guilds
compensation in terms of profits or interest, the only
possible answer is that they are claiming for something
that has ceased to exist. And the fact that it ended
with the old system is a priori proof that it possesses
no intrinsic value ; that it was nothing more than a
financial convention based upon the permanent hypo-
thesis of wagery. Intrinsic value survives social and
even industrial change. The fancy price paid for
diamonds or bric-a-brac is an artificial convention,
symptomatic of the existing class system and disappearing
with that system ; the price paid for food or clothes
approximates to intrinsic value, which can be ascertained
by squeezing out the commercial — or profit — price,
just as financiers, from time to time, squeeze their
watered capital. En passant^ it is worth remembering
that, if it be legitimate to squeeze out superfluous
capital, it is at least equally reasonable, infinitely more
moral, to squeeze the profiteer, whose reputation is now
blasted beyond repair.

II. A Chart of Classes and Functions

It is more than an assumption, it is a certainty,
that the rejection of the commodity theory, bearing
in its train the alternative principle of partnership
(whether with Capital or the State), must inevitably
leave the existing interests boukverses, for the new
class relationships thereby created involve other con-
ceptions of property, and varying and different claims
upon economic and social power. All industrial pro-

THE EQUITIES OF EXPROPRIATION 283

posals based upon the existing wage-system, those
outlined, for example, in the Whitley Report, do not
fundamentally change economic relationships, but
merely adumbrate a further accommodation between
the possessing classes and Labour. No revolution of
any kind is involved. It cannot be repeated too often
or too emphatically that there can be no revolution
within the ambit of the present industrial system. It
therefore follows that compensation can be easily cal-
culated for such disturbance and displacement as the
capitalist leaders may deem necessary to ensure the
continuance of the system. That is why all Fabian
reform meets with such ready acquiescence from the
more enlightened capitalists. But the moment we
transform Labour from purchaser to partnership we
fundamentally change the whole social fabric and begin
a new economic career motived by a new conception
of life-function.

To understand real value in function and material,
it is wise to chart the economic classes as they are to-day.
This diagram may help us : —

The State,
I

Possessing Classes (a). Labour.

\

III II

Rent, Interest. Direction and Professions. Foreman. Piece-work (c). Time-work.
Management (^).

(a) Depending upon the Possessing Classes are the luxury trades. We do not as
a general rule realise what a large part they play in our economy. Some idea may be
gleaned by the fact that prior to the war one West End firm had 26,000 open accounts,
not only in the West End, but also amongst the rich in the Provinces,

Less legitimate, I believe that there are several betting establishments with equally
large clienteles. Commercial undertakings such as these, not forgetting the Stock
Exchange, stand or fall with their patrons' prosperity, and, accordingly, have no claim to
compensation. Broadly stated, their value is commercial and not social. Economically
considered, they are largely but not entirely parasitic.

(b) The small trader comes under this head. He may be properly considered as a
distributive manager financed by the banks or by wholesale houses.

(c) The distinction between time-work and piece-work is arbitrary. Piece-work
is based upon the standard wage, which is finally calculated in terms of time. The
idea prevails that to pay piece-work is in some degree to modify the commodity theory.
It is, of course, a delusion. The final test of the commodity theory is whether Labour
retains any share or interest or control in the thing produced : whether by piece or
time, labour is bought to the exclusion of any such share.

284 NATIONAL GUILDS AND THE STATE

Assuming the fundamental reconstruction, and assum-
ing further equitable compensation for real value, we
have to enquire generally into the social value of the
assets, skill and experience of the four main divisions of
the Possessing Classes.

III. Consideration or Compensatio

N

The logic of wage-abolition, involving as it does the
elimination of rent and interest, leads inevitably to a
new definition of compensation. At present the word
connotes a payment in capital values — Government or
Municipal securities or what not — for land or machinery
legally acquired or voluntarily surrendered. But when
rent and interest disappear, it becomes evident that
the present meaning of " compensation " shades off into
something more nearly approaching " consideration."
If, for example, under the present system, we nation-
alised the railways, the shareholders would expect in
return Government Consols nicely calculated to yield
them the same income, for ever, as they now receive
from the rolling stock and permanent way energised
by the labour commodity. That is to say, they would
claim compensation on a commercial basis. And so
far as I know, every State Socialist would give it with
both hands. But a blackleg-proof Labour, achieving
partnership through its labour monopoly, destroys
commercial value and, in consequence, renders value-
less the nominal value of the railway shares. To pay
commercial compensation in such circumstances would
rob the labour monopoly painfully won of its economic
conquest. But it does not follow that the shareholders
would not be fairly entitled to some consideration, as
distinct from compensation, for such real value as the
Transit Guild acquired from them. The essential point
to be noted is that labour must not be compelled to
compensate somebody else for the value of the labour
monopoly it has legitimately secured for itself. In other

THE EQUITIES OF EXPROPRIATION 285

words, the commercial value of the control of labour,
now implied in every commercial balance-sheet, and
based on the commodity theory, can no longer be reckoned
as an asset. I think that it would be accurate to say
that this control of labour is explicit rather than implicit.
The balance-sheet is drawn on an agreed understanding
that the business is a going concern. But how can it
" go," as a commercial enterprise, unless it can buy
the labour commodity at the current price .'' Further,
it is only to the extent that the business can be dove-
tailed into the triumphant Guild that it has any real value,
to say nothing of commercial value, for which considera-
tion could be claimed.

In this connection, we may profitably remember that
the balance-sheets of well-established concerns disclose
large reserves and sinking funds, earned by Labour but
annexed by capital, expressly allocated to amortise
debenture charges and to safeguard against capital
depreciation. These funds, now in the sum total a
stupendous amount, are in equity compensation to
shareholders already paid by Labour. No Board of
Directors would dream of raising wages without first
providing for these special funds. The priority given
them is clearly at the expense of Labour. Yet another
factor in the balance-sheet must be remembered.
Stupendous as are the reserve funds, they are not equal
to the amount of profit yielded by Labour in maintain-
ing the labour reserve (the unemployed) during the past
century. If we suppose that every balance-sheet of
every private and public concern had debited them-
selves with the maintenance of every unemployed
worker engaged by them in normal and prosperous
times, and kept in reserve in days of depression, during
the last hundred years, we can but dimly realise the
overwhelming retrospective debt owing by manufac-
turers and traders in part to the Unions and in part to
the Community. It is, of course, an admitted historic
fact that it is the Unions, broadly in the case of the

286 NATIONAL GUILDS AND THE STATE

skilled worker, and the Community, in the case of the
unskilled, who have maintained the labour reserve to
the profit and protection of the industrialists. Whilst
any actuarial calculation in this regard is out of the
question, there is no reason why it should not be taken
into account in the final adjustment of Capital's claim
and Labour's counter-claim.

Whilst Guild principles, in logic and equity, reject
all compensation as now understood, and aim only at
fair consideration for real value received, it will be
found in the long run to be infinitely more considerate
than the State Socialist solution. The Fabian proposal
is to pay compensation on present commercial prin-
ciples, and then to recover the amount by imposing an
ever-increasing and mercilessly graduated income-tax.
Apart from the practical consideration that this income-
tax can almost indefinitely be shifted upon the shoulder
of Labour, the proposal is damned because it is inherently
dishonest. State credit, both moral and financial,
is assuredly an asset of a high order ; but what shall
be said of a Bureaucracy that gives with one hand and
grabs back with the other .'' Such cynicism destroys
the confidence that every citizen should have in his own
Government and people. The true role of the State
is to see that the recipient of good consideration for
real value shall be protected in his property. Cat-and-
mouse finance may be appropriate to Lombard Street ;
it is out of place in serious affairs. In any event, income-
tax, however graduated, disappears when the Guilds
undertake, as Guilds, to feed the national exchequer.

IV. Real Value

Our next task is to apply the principle of considera-
tion, as distinct from legal compensation, to the present
possessors of real value. Of the four classes shown in
our chart, the first comment that springs to the surface
is that there is a fundamental difference between rent

THE EQUITIES OF EXPROPRIATION 287

and interest, on the one hand, and management and the
professions, on the other hand. For whilst rent and
interest rely upon the legal possession of dead property
for consideration, the other two rely upon the social
value of their functions. It cannot be seriously argued
that in our social economy material is more valuable
than function — material is valueless unless a thousand
human functions are applied to it — yet so anomalous
are the principles of legal compensation that the owners
of dead assets claim and receive far more than do the
workers of every grade, whose only asset is their skill
and experience. It is evident that Guild principles
would rectify such topsy-turvy valuation. At this point,
we hit upon a curious reversal of the commodity theory.
Capital insists upon regarding itself as a function and
labour as a commodity ; we discover on analysis that
it is capital that is the commodity and labour that is
the function. It would not, therefore, be inequitable,
according to present moral canons, to put upon capital
the precise commodity valuation that capital has hitherto
placed upon labour.

The problem that confronts us is not how to dis-
regard legal and established rights in property — ours
is an economic and not primarily a legal revolution —
but rather how fairly to assess every claim upon the
community arising out of economic change. Such
claims must be considered mainly upon real as dis-
tinguished from capital value, and partly upon natural
justice and public policy. There is some substance
in the cry of the widow and orphan for consideration,
but I have observed that the appeal has always been
for the widows and orphans of the displaced or im-
poverished propertied classes. I have not yet dis-
covered why the same tenderness should not be shown
to the widows and orphans of every social grade and
class. Social responsibility is precisely the same in
regard to all of them. I parenthetically mention these
hapless dependants because they are invariably quoted

288 NATIONAL GUILDS AND THE STATE

as symbols of unmerited suffering caused by some
social upheaval for which they are not responsible.
It is evident that they possess no real value for our
assessment ; it is equally evident that natural justice
and social equity necessitate their care and nurture.
I will add that there is no sanction for the assumption
that the demand for justice for Labour precludes the
sympathetic understanding of hardship wherever it may
be found.

The real value inhering in material — buildings,
machinery, railways, ships, or what not — is precisely
what the Labour monopoly — the Guild — sets upon it
as a saving of time and effort in lieu of creating its
substitute. What Labour has made, it can make
again. Let us suppose a bargain between the owner
or owners of a factory and a Guild. The Guild says
to the owner, " We want your factory." The owner
replies that his profits on the factory average ;^5ooo
a year. At 5 per cent this represents a capital value
of ^100,000. The Guild replies: "We know nothing
of capital value — that went with the wage-system —
your factory is worth to us exactly what we should
lose in time and labour in constructing a similar factory.
In terms of money that would be ;^i 5,000. But we
will not pay vou in money. We will make you a yearly
allowance over a term of years, or a pension. That is
all it is worth to us ; our decision is final ; let us know
your decision by this day week." The assessment of
land is not so easy, because you cannot create a sub-
stitute for land. That is, of course, the fundamental
distinction between rent and interest. But inasmuch
as rent depends solely upon its power of exaction, always
rising and falling in obedience to this law, neither sales
nor profits being involved so far as the landlord is
concerned, the Guild will not find it difficult to reach
a land value in the same ratio to real value as the factory
value is to capital value. Thus, under capitalism, if
the factory owner gets ^/^i 5,000 on a capital value of

THE EQUITIES OF EXPROPRIATION 289

;^ioo,ooo, and assuming the land to be valued at ;^i 5,000,
the landlord would receive from the Guild the equivalent
of about £1^00, payable in the form of a pension. The
difference between ;^i 5,000 and ;^i 00,000, in the case
of the capitalist, and of ;^25oo and ;^i 5,000 in the case
of the landlord, represents the capital value of the existing
control of the labour commodity, plus whatever credit
is built upon it. In this way would enlightened Labour
squeeze out artificial value.

V. Material and Function

The diiference between material and function is
that material permanently awaits the application of
labour, whilst function must be a continuing process.
It is for this reason that bricks and mortar are deemed
to be a safe investment, independent of death and many
vicissitudes (though not of all, war, earthquakes, decay
of the community, for example), whilst function depends
upon life and health. We reach, in consequence, a
striking result, which is surely a deadly criticism of
current commercial economy. A doctor is presumably
a more valuable member of the community than a money-
lender. Yet the money-lender, saving ;^2ooo, invests
in a house which yields him an income of ;^2oo and is
unaffected by death ; the doctor spends ;^2ooo upon
his training and the building up of his practice, then
dies suddenly, and his capital is dissipated and irre-
coverable by his heirs. The difference marks the social
valuation set upon the house and the function of healing.
But as we move towards a saner way of life, it grows
more evident that healing is a more valuable factor than
house-owning. Indeed, preventive medicine, one of
our most necessary functions, as things are to-day,
spends itself in improving house-property, without
creating its own capital value. After ten years, a
doctor, in seUing his practice, is lucky to get two years'
purchase.

290 NATIONAL GUILDS AND THE STATE

Thus we see that function is not susceptible of
capital valuation. The professional classes, more or
less conscious of this, have formed professional asso-
ciations, which, whilst nominally aiming at the improve-
ment of their technique, are really combinations to secure
and increase their incomes. In a commercial age, we
cannot blame them if they succumb to commercial
influences. I doubt whether these associations do not,
on the whole, tend to atrophy whatever genius may be
distributed amongst them. There were great doctors
before the Medical Association was heard of, there
were great architects, or at least great architecture, in
the days of Nineveh, Antioch, Athens and Cordova.
The Pyramids were erected before civil engineering
became a profession, and I am not personally convinced
that modern cathedrals compare in beauty or workman-
ship with Canterbury Cathedral or York Minster.
So far as skill and technique are concerned, I suspect
there is as much of it in the deep sea of British crafts-
manship as can be found on the dry land of the pro-
fessional associations. Nor do I forget that the vast
bulk of professional work, medicine perhaps excepted,
is devoted to the interests and amenities of the possessing
classes.

When, therefore, we are asked how the professional
classes will fare under a Guild administration, we must
reply that function grows increasingly valuable, but
that the consideration they will receive will be based
upon the intrinsic value of their services and not upon
the commercial value they now demand through their
commercialised associations. The less these associa-
tions concern themselves with class interests and the
more they devote themselves to the technique, skill,
efficiency and social value of their members, the better
will it be for all concerned when all commercial values
go the way of the wage-system.

In this necessarily inadequate survey of a new

THE EQUITIES OF EXPROPRIATION 291

principle of social consideration in contrast with legal
and commercial valuation, it becomes clear, I think,
that the rejection of the labour commodity theory
adds a new and germinating content to the classical
economy.

VI
THE CIVIL GUILDS

THE CIVIL SERVICE

I. The Service and the State

In the foregoing chapters on Transition, I have dealt
with the organisation of production, having previously-
considered the relation of the producer to the consumer.
It is an integral part of my argument that produc-
tion and consumption, being economic processes, fall
within the ambit of Guild activities ; that, accordingly,
the Guild organisation must embrace and provide for
every stage of manufacture and distribution from the
raw material to the consumer's door ; that all these
functions must be prescribed in the Guild charters,
and that so long as the Guilds act in the spirit and
letter of their charters, but subject to developments that
involve public policy, the Guilds may pursue their work
without State intervention, although, of course, with
State representation upon the governing bodies of the
Guilds. This representation is based upon the hypo-
thesis that the State is trustee and owner of the material
assets. It cannot be too often repeated that the only
monopoly possessed by the Guilds is the monopoly
of their own labour. Every asset from the machinery
to the looking-glass in the typists' room must in principle
be vested in the State.

The withdrawal from the State of the economic
functions, coupled with the fact that State policy and

292

THE CIVIL GUILDS 293

administration is an affair of citizenship, implies that
the State has a non-economic role to play, none the
less, but rather the more, important because it is almost
exclusively concerned with the spirit, with conduct,
with the finer shades and attributes of social life. It
must, therefore, be guided by the moral and spiritual
needs of the community, internally and in its external
relations. Thus, education, so far as the humanities
are affected, is obviously a vitally important State respon-
sibility. Equally, the public health of the community,
both preventive and curative, falls under the jurisdiction
of the State. Since law is founded in conduct, in the
rights and relations of individuals and groups, each to
the other, it follows that law, in inception and applica-
tion, becomes a State function. Nor can the State, no
longer trammelled by economic " pulls," afford to dis-
regard a perverted Press, a potent instrument not only
of information, but of education. All these activities
may be said to be spiritual, in the true sense of the
word ; hence my reason for contrasting the spiritual
State with the economic formation of the Guilds, cul-
minating in power and authority in the Guild Congress.
The logic of this is plainly that Citizenship means the
pursuit of the spiritual, whilst Guildsmanship is the
application of social principles to the material. The
measure of our civilisation will be found in this : that
on all the finer issues of life, conduct and faith, the
Citizen dominates the heart and the imagination of the
Guildsman, subduing his selfish or sectional desires to the
enduring truths sought out and tested by the spiritually
minded. It is my belief that this can only be attained
by an enfranchised democracy. He who becomes a
democrat to grasp power is a recreant ; the essence of
Democracy is that power shall be distributed amongst
all men, that they may live richly in the full light of truth,
discovery, the arts and graces. In other words, the
conquest of nature by Democracy is a material means
to a spiritual end.

294 NATIONAL GUILDS AND THE STATE

The chief administrative arm of the State is the Civil
Service, whose business it is to give effect to the mandate
of the citizens expressed through Parliament. Associated
with the Civil Service, but perhaps motived differently,
are the Medical, Educational, and Legal Guilds. These
are sometimes described by Guildsmen as the " Spending
Guilds." In truth, however, the term is not happy.
After all, a doctor, where health is concerned, is a pro-
ductive agent ; a teacher, where education is concerned,
is a productive agent. They have each acquired a certain
skill for which there is effective demand and of a social
value no more easily valued than labour quit of its
commodity basis. For that matter, the Distributive
Guild would be purely a spending Guild. The real
distinction between the Civil and Productive Guilds
is found in function and in their different relations to
the State organisation.

If we keep steadily in view the basic fact of Guild
organisation, namely, the monopoly of labour, whether
intellectual or manual, it will not be difficult to arrive
at an understanding of the rights and driving force of
the Civil Guilds. Certain distinctions between these
Guilds at once suggest themselves. Thus, the Medical
and Legal demand a training not required in the Civil
Service proper. .Again, the training in the Educational
Guild is peculiar to itself. On the other hand, the Civil
Service not only demands a long training in social
problems, but exercises unique power by reason of its
direct attachment to the State. The difficulties and
dangers inherent in any bureaucracy, however wisely
governed and sympathetically administered, cannot be
ignored. This is certain : the Civil Service must take
on the colour of the Government, which in its turn depends
upon the State, acting through the medium of Parliament.
But this said only half is said. If I left it there, there
would be an assumption that the Civil Service must be
essentially servile in its relations with State and Govern-
ment. Public policy must be obeyed ; that is funda-

THE CIVIL GUILDS 295

mental to the present or any future Constitution ; but
the rights and liberties of the Civil Service are not founded
in subservience ; they can only be finally asserted in
function, in the faithful discharge of duties. These
functions inhere in the nature and quality of the work
assigned, which confers, at one and the same time,
responsibility and liberty. The Civil Servant who does
his work to the satisfaction of his group or department,
who acts in the spirit and letter of his contract with the
State, is entitled to the complete rights of citizenship,
precisely as though he were a miner or engineer. The
day has gone for ever when admission to the Civil Service
differentiates the Civil Servant from his fellows, as though
he belonged to a privileged corporation, paying for the
privilege by the sacrifice of his political rights. The
segregation of the Civil Service is a first step to the
Pretorian Guards and cannot be tolerated. Democratic
safety proscribes privileges, social or financial, to the
Civil Servant or to any class. In pay, leave, pension,
or social consideration, he has no higher claim than his
fellow-workers.

With certain important reservations to which I shall
refer, we may take the recent Report of the Machinery
of Government Committee ^ as the basis of our approach
to the Civil Guilds in general and the Civil Service in
particular. The review in this Report of the consti-
tutional position is sound within the limits assigned to
it by the terms of reference. But, as I shall show later,
it takes no cognisance of the human factor, of the volun-
tary associations and Trade Unions within the Civil
Service : treats the personnel as pliable tools, ready
to respond to any and every behest made either by the
State or the hierarchy : is apparently unconscious of
any movement or tendency towards democratic control.
When we come to consider the claims of the Civil Servants,
we shall see how grave an omission this is. Nevertheless

' Cd. 9230. Price 6d. This Report was signed December 14, 1918, and issued
in January 1919.

296 NATIONAL GUILDS AND THE STATE

the Committee has proceeded on sound lines. " Upon
what principle are the functions of Departments to be
determined and allocated ? " asks the Committee. They
answer : " There appear to be two alternatives, which
may be briefly described as distribution according to
the persons or classes to be dealt with, and distribution
according to the services to be performed. Under the
former method, each Minister who presides over a Depart-
ment would be responsible to Parliament for those
activities of the Government which affect the sectional
interests of particular classes of persons, and there might
be, for example, a Ministry for Paupers, a Ministry for
Children, a Ministry for Insured Persons, or a Ministry
for the Unemployed. Now the inevitable outcome of
this method of organisation is a tendency to Lilliputian
administration. It is impossible that the specialised
service which each Department has to render to the
Community can be of as high a standard when its work
is, at the same time, limited to a particular class of
persons and extended to every variety of provision for
them, as when the Department concentrates itself on
the provision of one particular Service only, by whom-
soever required, and looks beyond the interests of
comparatively small classes. The other method, and
the one which we recommend for adoption, is that of
defining the field of activity in the case of each Depart-
ment according to the particular service which it renders
to the community as a whole. . . . We think that
much would be gained if the distribution of depart-
mental duties were guided by a general principle, and
we have come to the conclusion that distribution according
to the nature of the service to be rendered to the com-
munity as a whole is the principle which is likely to lead
to the minimum amount of confusion and overlapping."
I do not know whether the Committee were guided
to this conclusion by the writings of Senor de Maeztu.
Here, at all events, reached on empirical grounds, is
the acceptance of the principle of " the primacy of

THE CIVIL GUILDS 297

things," a declaration of the functional principle, a
confession of faith in social values having precedence
over personal interests. Nor will any Guildsman fail
to note that this is the Guild principle that workers of
every degree shall subordinate themselves to the primary
purpose of the organisation. Concurrently, however,
we must consider the human beings who constitute the
organisation and prove beyond cavil that liberty, far from
being restricted, finds wider scope in a society where duty
faithfully done confers life and confers it abundantly.

On the functional principle, we can now see the
whole range of activities of the Civil Guilds. The
Committee suggests the following : (i.) Finance, (ii.)
and (iii.) National Defence and External Affairs, (iv.)
Research and Information, (v.) Production (including
Agriculture, Forestry, Fisheries, Transport, and Com-
merce), (vi.) Employment, (vii.) Supplies, (viii.) Educa-
tion, (ix.) Health, (x.) Justice. Much of this, from the
Guild standpoint, is transitory. Thus " Production "
would be the business of the appropriate Guilds, whilst
Employment, on the Guild hypothesis, is a purely Guild
affair. The proposed Department of Supplies is the
obvious sequel to the Ministry of Munitions. Its pur-
pose, as proposed, is (d) to eliminate competition between
Departments for labour, material, and services ; (F) to
ensure that the prices paid and the conditions imposed
under Government contracts for various classes of work
should, so far as possible, be arranged upon uniform
lines ; and (c) to secure economies in the use of technical
staffs, such as contracting, accounting, costing, and
inspecting sections. Obviously, nine-tenths of the work
here adumbrated would be absorbed by the Guilds. So
far as " Research and Information " is technical, it would
be superfluous under a Guild system ; so far as it is social
and political, it might prove valuable when we come to
consider the Press ; so far as its Research is confined to
pure science, its value would be incalculable. But that
presupposes a clear connection with the Universities.

298 NATIONAL GUILDS AND THE STATE

_ So much for function : the thing to be done is the
thing ; man must do it at his peril ; it is imperative.
Thus, by the sweat of his brow does man win his bread,
and, in consequence, win also the rights, liberties, and
amenities that accrue in an enfranchised society. We
must be careful, however, not to tear function into
social fragments ; the distribution of personnel is a
problem in itself and may be solved irrespective of
function. For example, whilst it is obviously sound
both in principle and policy to adopt the functional
principle, it by no means follows that there must be as
niany Guilds as there are functions. If we accept the
division of functions laid down in this Report, we are
not, therefore, compelled to divide the personnel into
as many Civil Guilds. There are many functions,
some barely related, in the productive Guilds. One
engineer may make locomotives, another automatic
machines, another motors ; yet they all properly belong
to the Engineering Guild. In like manner, our Civil
Service, by appropriate subdivision, may administer
finance, home and foreign affairs, research and informa-
tion, and, on behalf of the State, have its representatives
on the Education, Medical, and Legal Guilds, as also
on the Productive Guilds. We are accordingly thrown
back upon the necessity of definition. What, then,
is a Civil Servant .'' I think he is one employed directly
by the State to transact State business. Unless, therefore,
he has a special technical affiliation — doctor, teacher,
lawyer, civil engineer — and if he is definitely employed
by the State, he may be correctly defined as a Civil
Servant and be eligible as a Civil Guildsman. The
distinction between him and, say, a doctor lies in this :
the doctor must pay allegiance to his profession, which,
in its turn, negotiates as a unit with the State, whilst
the Civil Servant has no such divided allegiance, save
in so far as his Guild protects him in the conditions of
his employment. The distinction, if subtle, is vital.
The Civil Service cannot, in the nature of things, exercise

THE CIVIL GUILDS 299

absolute control ; the Medical Guild, once organised,
can control medical policy and practice within the terms
of its charter. The same can also be said of the Educa-
tion Guild. In the case of the Civil Service, the State
adopts it as its daily medium, acting through its depart-
ments at first hand ; in the case of the professional
Civil Guilds, the State defines its policy and terms in
their charters. The practical difference would, therefore,
seem to be that the charter of the Civil Service Guild,
whilst giving protection as to terms of employment,
must necessarily ensure pliability of service and provide
for unforeseen contingencies ; the State must have direct
contact with its own executive officers, who, in addition
to routine duties, are always faced with the unexpected.
On the other hand, the professional Guilds can plot
out their work in advance and meet the State, through
its Government, in a corporate and not an individual
capacity.

We can arrive at no clear understanding of the rights
and duties of the Civil Service until we apprehend the
role of the Treasury in administration. That raises
constitutional and practical problems, significant and
decisive in the future governance of Great Britain.

II. The Treasury

" The Department of Finance," says the Committee
on the Machinery of Government, " must necessarily
have an exceptional position among all the State Depart-
ments." The cashier in a counting-house is doubtless
in an exceptional position in that he disburses and
accounts for money ; but it is only in the Civil Service
that the Finance Department, generally known as the
Treasury, occupies an exceptional position coupled with
an overriding authority. The reason is not far to seek.
Parliament votes money and the Treasury sees that it
is expended in accordance with Parliament's intentions.
To that there can be no reasonable objection ; it is

300 NATIONAL GUILDS AND THE STATE

plainly the democratic safeguard against both auto-
cracy and bureaucracy. The power of the purse is one
of the greatest of Parliamentary assets. It has been
a political issue since the days of Pym and Hampden ;
it is woven into our history. If that were all, there
would be nothing more to add. But upon this founda-
tion has been erected a system as harsh and oppressive
as the autocracy it was designed to control. To assert
that the Treasury ensures the expenditure of public
moneys strictly in accordance with the vote is to tell
barely one-half the story. Our Committee remarks
that "the service which it has to perform — that of
supervising and controlling all the operations of Govern-
ment in so far as they affect the financial position —
involves not only the direct administration of taxation
and other branches of revenue, but also the control
of all forms of expenditure, including the incurring
of obHgations or liability to expenditure." The crux
is in the word " control." The most captious critic
will recognise the necessity of " supervision," plainly
a Parliamentary mandate to the Treasury ; it is equally
clear that no Department, in any conceivable circum-
stance, must be allowed to incur liabilities beyond the
purview of the sum voted ; but by what sanction is
control added to supervision ?

I imagine it is rooted in the fact that policy rests with
the Prime Minister, who is almost invariably First Lord
of the Treasury. With the Chancellor of the Exchequer,
this enables him to mould the work of the Civil Service
to public policy, or to subserve his political purposes.
That the Civil Service must move in an atmosphere of
public policy is axiomatic ; it is disputable whether it
should, even by a wink, give aid or comfort to the Prime
Minister's political ambitions. It is, of course, extra-
ordinarily difficult to distinguish between public and
political policy, passing the wit of any tribunal to decide.
Nor is the point of great consequence : what really
matters is that the Treasury must not be permitted to

THE CIVIL GUILDS 301

exploit its fnancial power by imposing upon the whole
administrative body its own particular interpretation of
public policy. Such interpretation must clearly rest
with a much more representative body of Civil Servants.
It is precisely here that we encounter the problems of
democratic and functional control. For if the general
direction or tendency of Civil Service policy be no longer
under the special guidance of the Treasury, it must
pass to a body, formal or informal, representing all
Departments and all grades of personnel.

This dual control by the Treasury is no new issue.
It has developed with the growth in functions and
personnel of the Civil Service. It was an admirable
institution in the days of laissez-faire. Its policy of
rigid economy culminated in the Gladstonian period, a
tradition to which it still adheres. The astronomical
figures of war expenditure have forced its hand, but it
still exercises a wary eye upon the wages of its char-
women. Supervision and control have been the twin
pillars of the Treasury edifice since the days of Sir
Robert Peel. Indeed, " dual " is an inadequate term.
It is, at least, triple ; for not only does it supervise
and control actual expenditure, it vetoes financial pro-
posals, through the Chancellor of the Exchequer, before
they reach ParHament. " The control of expenditure is
exercised primarily," says the Report from which I have
been quoting, " through the preparation of the annual
estimates, which are subject to the approval of the
Treasury in detail, and when once sanctioned by the
House of Commons cannot be varied, at least in the
direction of increase, except with Treasury consent."
That is to say, the Minister of Public Health or of
Education, before coming to Parliament with his pro-
posals, must first run the gauntlet of the Treasury,
whose officials may know as little of health as they do
of education. Observe, too, that here is a clear instance
of bureaucratic domination of Parliament ; a coterie of
officials arrogates to itself the right of withholding from

302 NATIONAL GUILDS AND THE STATE

Parliament what may be a vital decision touching health,
education, local government or defence. So tenaciously
does the Treasury cling to this particular custom, that
if a Minister determines to "go to the House," and can
carry the Cabinet with him, the Chancellor will resign.
As we know to our cost in deferred boons, it is generally
the Minister who acquiesces or resigns. The Heavens
would not fall, nor would our financial stability be
seriously undermined, if the Commons were to decide
between the Treasury and the spending Department
concerned. Both Minister and Chancellor could state
their case. Not the least of the evils of this svstem is
that the spending Departments, knowing their Treasury,
are apt to provide a safe margin in their estimates purely
for bargaining purposes. A Chinese mandarin has
nothing to teach a trained British bureaucrat.

Without labouring the question, which bristles with
constitutional difficulties, it is evident that effisctive
responsibility must be taken from the Treasury and
distributed throughout the Service, if the Guild principle
is to prevail. Are there signs of any such transition ?
The Collectivists show little, if any appreciation of the
urgency of the problem. The Machinery of Govern-
ment Committee, upon which sat Mr. J. H. Thomas,
M.P., and Mrs. Sidney Webb, discuss the status of
the Treasury, as of Civil Service organisation, almost
exclusively from the bureaucratic standpoint. They
cautiously feel their way to an innocuous Advisory
Committee, composed of several Departments, but
finally declare for a more thorough invasion of the
spending Departments by Treasury officials. They
even advocate transferring from the Local Government
Board to the Treasury such powers as are now exercised
by the Board : " It would be desirable that such relations
as the central Government maintains with the Finance
of the Local Authorities throughout the country should
be in the hands of the Treasury rather than (as at
present) of the Local Government Board." But the

THE CIVIL GUILDS 303

bureaucratic spirit betrays itself most clearly in para-
graphs such as this : " The manipulation of this work
involves considerations both of personnel and materiel.
Attention has been paid to the selection of the staff, their
classification, their assignment to appropriate duties,
their hours of work, their promotion, increments, leave,
and sick leave." Every word of this would apply as
appropriately to sheep as to men and women ; the
various associations of Civil Servants are ignored : a
reinforced Treasury with " government from above " —
the rock upon which the Fabian ship has foundered :
efficiency : a first division of socially select officials, who
have graduated at approved universities, suave, velvety,
adroit, with a Fabian training in the art of stroking the
democratic lion : this is the picture conjured up by
these devotees of our social hierarchy.

Diffisrent in spirit and purpose are the views of the
rank and file. On the subject of the Treasury, the
Civil Service Clerical Alliance has this to say : " The
present functions of the Treasury are at least dual. It
tries to combine the high finance of the nation with the
domestic economy of the Civil Service. We suggest
that there are here two specialisms. On the former we
do not pretend to speak, but we are confident that the
management of the Civil Service from the point of view
of efficiency and economy (and inefficiency always means
waste) is a matter for an expert Department. It is not
easy to see why the two functions should be mixed, and
to hand over the management of the Service to a Board
of Control outside the Treasury would, in our judgment,
result in two economies. The first economy would
follow from the actual improvement in the management
of the Civil Service, and the second from the fact that
the Treasury would be free to supervise more effectively
national finance, the latter being, we suppose, its prime
business." ^

' Memorandum submitted to the Select Committee on Nationil Expenditure by
the Civil Service CJeripal Alliance,

304 NATIONAL GUILDS AND THE STATE

In these two contrasted quotations, we perceive two
fundamentally different approaches to efficiency. In
the former the big wallahs are to meet and construct
a machine, well oiled in all respects — " classification,
assignment of duties, hours of work, promotion, in-
crements, leave, sick leave " — but motived and guided
from above, with an omnipresent Treasury always
round the corner to impose discipline by the power
of the purse. That were surely efficiency without a
soul. The Civil Service Clerical Alliance boldly adopts
the democratic method. In effect, they say : Throw
the responsibility upon the working shoulders ; judge
by results ; responsibility, being what it is, must, for
its own safety, sternly reject the inefficient ; a group,
to stand well with its kindred groups, will strive to the
limit of its capacity. It is not merely Democracy ; it
is human nature. Nor will the functional principle
suffer. Mr. J. C. Monahan, the Chairman of the Alliance,
says : " The Civil Service has lost in public esteem of
late. The tone must be raised. The way is clear. In
every rank and every Department there are to be found
those with whom the idea of the Service is dominant.
They do consciously subordinate interests of persons
and classes to the interests of the public service." The
question must be asked : Shall we get the best service
with the highest efficiency from a self-respecting and
self-governing organisation, or from docile State em-
ployees, whose only business it is is to do as they
are told, leaving thought and decision to the first
division ?

There can be no doubt that the detailed control over
administrative work by the Treasury, by hampering
initiative, injures efficiency. A variation of method
creates cbnvulsions ; the lines have been laid down, even
the grooves are smooth ; how inconsiderate of some
young man in a hurry to seek short cuts or evolve new
methods ! Even plans that save money are frowned
upon ; personal susceptibilities are hurt, the estabUshed

THE CIVIL GUILDS 305

routine is disturbed. In every Department can be found
men now going at a safe jog-trot who began their official
careers with high hopes of great accompHshment. For
a while they stormed and struggled, bombarding their
chiefs with minutes and memoranda, all designed to
improve and speed-up the work of their section. Some-
times the chief, resting in his last billet before retirement
and pension, was too tired or indolent to interest himself ;
oftener, a tussle with the Treasury was foreshadowed.
Gradually enthusiasm has been damped down, the
young Civil Servant finding scope for his energies in
the mild excitements of social life in Suburbia. In the
sum total, it may be affirmed that what the Treasury
has saved in pence of cheese-paring it has lost in pounds
of enthusiasm and initiative. Observe, too, that the
Treasury test of efficiency is necessarily the test of
expenditure, with the still further handicap that the
expenditure must conform to the ipsissima verba of a
Parliamentary vote. Nor must we forget that the
Treasury itself is the stoutest supporter of that most
inefficient system — the social and financial separation of
the first from the lower divisions. Close corporations
invariably come to grief, not only because they become
set in their ways, but also because they exclude fresh
blood. The Treasury hierarchs themselves belong to
the first division ; they are its shield and buckler. It
is the most highly privileged class in our national Hfe ;
its power is out of all proportion to its abilities ; it is
redolent of the antique spirit that still hovers over
Oxford and Cambridge. The work of the world is
done by men of tougher fibre. It does not rest its case
upon its efficiency, but upon its manners, which charm
only to deceive.

We cannot, then, consider the claims of the rank and
file of the Civil Service until we reach some understanding
of the true role of the Treasury. The control it now
exercises in every administrative Department is not
sanctioned by law, still less by common sense. Un-

3o6 NATIONAL GUILDS AND THE STATE

doubtedly it possesses, both in law and common sense,
a right of supervision ; its function is to make sure that
public money is spent in the spirit and for the precise
purpose voted by Parliament. But that is a far cry
from control ; from the irritating particularity of its
present methods. Another function it now exercises is
to co-ordinate the expenditure of the various Ministries
and Departments. On that it seeks to co-ordinate the
work, as a whole, of the Civil Service. In doing this,
it arrogates power that properly belongs to Parliament.
Parliament entrusts it with a definite financial function ;
as time has passed it has expanded that function into
an^ overriding power over policy, which is an affair of
citizenship and not of finance. It is evident that, in
view of the new forces now brought into play, the
Treasury must revert to its original function, with all
the political implications of that reversion. The co-
ordination of Departmental policy, which is of prior
importance to finance, must become the work of the
Cabinet, and of Parliament ; control must be sharply
differentiated from financial supervision and become
the function of a Committee in touch with the living
forces of the Civil Service. These are the precedent
conditions to the organisation, too long deferred, of the
Civil Service upon democratic principles and methods.

III. The Status of the Civil Servant

The fact that the civil servant is a State employee
sometimes conveys the idea that its discipline must be
military in character ; that unquestioning obedience is
its mot d'ordre. A moment's consideration demonstrates
that a Civil Service with a military regime is a contra-
diction in terms. Historically, and in fact, not the
least of its functions is to curb military pretensions :
to stand foursquare for the predominance of the civil
power. But hitherto the status of the civil servant has
remained vague and indeterminate. He is classed as a

THE CIVIL GUILDS 307

" clerk " — and " clerk " may mean anything. Entrance
to the Service is based merely on an average attainment
of conventional education ; there are no professional
tests. Yet to administer efficiently calls for considerable
technical knowledge and training ; economic and social
problems must be studied and, in some degree, mastered.
The degree of mastery is, of course, conditioned by the
imagination fused with the study. Alternatively stated,
to know social problems thoroughly predicates a fairly
high standard of culture. Be that as it may, the fact
remains that the Civil Service, whilst in daily contact
with factors vital to social health, has no professional
standing, retaining its economic power by its labour
monopoly, artificially contrived by its master the State.
It is not, therefore, surprising that its more far-sighted
members, alive to its anomalous and none-too-popular
position, are deeply concerned to gain for it a definitely
professional status. Even as I write, the Society of
■ Civil Servants, in conference, is considering inter alia
proposals {a) to codify and maintain at a high standard
rules of professional conduct for the Civil Service ; (F)
to promote the study of subjects bearing upon the work
of civil servants — e.g. Sociology, Economics, Statistical
Science, Administrative Technique ; (c) to found courses
of lectures and debates and generally to encourage the
extension of education in subjects affecting, and dealt
with by, the Civil Service.

Significant and germane is the record of action of the
Association of Staff Clerks, now known as the Society
of Civil Servants, which has led up to this effort to secure
professional status. The story is told in an interesting
and amusing pamphlet issued by the Society.^ The
Second Division Clerks " were brought to a sense of
grade unity by a general conviction that a common
improvement in salary and opportunity was worth more
than the occasional promotions to be obtained by unsocial

1 The Society of Civil Servants, Pamphlet Series No. i. (E. E. Eeare, 2 Oli Queen
Street, Storey's Gate, Westminster.)

3o8 NATIONAL GUILDS AND THE STATE

rivalry." When war broke out, " all the world obtained
war bonuses, but for a time the Staff Clerks sacrificed
their wives to their dignity and refused to ask for an
adjustment of salary. In the end, however, their wives
were too strong for them and the Staff Clerks' Association
was formed in order that a claim for a war bonus might
be placed before the Conciliation and Arbitration Board."
This was successful, and, in consequence, " the Staff
Clerks widened their constitution and became representa-
tive of the middle body of the public service, with the
lower ranks of clerical workers organised in the Clerical
Alliance and the upper ranks still at loose ends." And
now civil servants with more than ;^3'oo a year, they too
not_ unmindful of war bonus, began to join and the
Society of Civil Servants was born.

So far it is a simple instance of financial reaction ;
but what follows is yet another proof, if proof were
required, that men when materially satisfied do not
slack but rather bend their energies to greater effort.
The Society immediately " extended its aims beyond
questions' of the market and the larder, and set itself
to the task of defining and confirming the Civil Service
as a profession, with its own technique, its distinctive
qualifications, and its special tradition." Not forgetting
the market and the larder, making full provision for
the discussion of that tiresome topic and action thereon,
the Society of Civil Servants aims at " corporate action
similar to that which is furnished for their members by
the British Medical Association and other professional
bodies." This conclusion was not reached without a
struggle : " The issue narrowed itself to the difference
between the old-fashioned trade union aim of another
penny an hour and the wider claims for responsibility,
status, and control, in which payment is only one
element." This accomplished, the Society can now
look in upon its own internal working and consider
how best to achieve its professional aims. " The Society
of Civil Servants now proposes to think out its own

THE CIVIL GUILDS 309

problem and to mould its experience into a technique.
Its members are no longer to be a promiscuous horde
of clerks with pension privileges, but a profession
with expert training and technical knowledge, as clearly
qualified for the special task of public administration as
chartered accountants are for accountancy."

The critic may remark that the civil servants in this
Society are the most favourably placed. Omitting the
controlling elements, this is true ; but the lower grades
evince the same determination to become efficient ; to
justify themselves by function and not by State protection.
The Civil Service Clerical Alliance takes up the organisa-
tion where the Society of Civil Servants leaves off. The
two organisations do not compete for membership.
This is what the Alliance has to say of its objects :
" This union of forces was created and is being main-
tained with the twofold object of improving the efficiency
of the Civil Service and of protecting civil servants and
promoting their interests. The Alliance takes pride in
elevating the ideal of the public service and standing
for its efficiency and integrity, an imperative duty in
face of the ignorant criticism which has been levelled
against it by the more irresponsible section of the Press.
To secure a more efficient Civil Service, however, it is
necessary, as has been implied above in reference to
industry, to reorganise it in such a manner as will create
a community of interest in making it more competent."
The Alliance's sense of unity in the Civil Service expresses
itself in a practical way. It is opposed to patronage in
all forms, whether by limitation of candidature that
depends on personal selection, or of definite appoint-
ments of individuals by Ministers or officials. Secondly,
it holds that no artificial barrier should restrict the pro-
motion of civil servants of whatever class or department.

A Guild spirit breathes through the pronouncements
of both these organisations ; as they see it, theirs is
no perfunctory task to be performed with pedestrian
comfort ; they have difficult and subtle work to do.

3IO NATIONAL GUILDS AND THE STATE

so difficult and subtle that it constitutes a definite
profession, in which they must become proficient — a
profession so important to the community that personal
considerations are of secondary importance. They
recognise, too, that they are not immune from the
criticisms of their master the State, and through the
State of the general body of citizens. Again I quote from
the pamphlet of the Society of Civil Servants : " Public
administration is only justified in its efficiency in carrying
out the designs of the community, and it cannot be finally
accepted on the standards of its own professionals. It
must satisfy a wider test and show that it is adapted to
meet the needs of the community." In economic affairs,
like good Guildsmen, they are not afraid to apply their
labour monopoly ; like good Guildsmen, they defer to
the prior rights of the citizen, recognising that the
spiritual forces are sovereign over the material. It is not
the Treasury they set out to obey ; they pay obeisance to
the community organised as a State.

We perceive in all this a new conception of official life,
a vivifying contact with the social and industrial spirit
now so rapidly transforming the ancient landmarks in
politics and the workshop, an affirmation of that
functional principle which, rightly applied, establishes
definite status and destroys the wage-system, the sinister
bar to status. What puzzles me is that the Report on
the Machinery of Government, signed by responsible
officials, thinkers, and politicians, issued in 1919,
should ignore the existence of these organisations,
should betray unconsciousness of this spirit, so clearly
expressed by the men and women who are expected to
operate the " machinery." Does Viscount Haldane of
Cloan, O.M., K.T., the Chairman of this Committee,
imagine that his colleagues of government, whether in
or out of office, whether students or high officials, can
raze this spirit and ride rough-shod over those who
mean to make the Civil Service a profession, with the
pride and independence of professionals ? The Viscount

THE CIVIL GUILDS 311

is very old, and youth will be served. We can understand
Mr. E. S. Montagu, Sir Robert L. Morant, and Sir
George H. Murray ensuring in any official report the
dominance of the Treasury. Mrs. Sidney Webb
doubtless imagines that an exercise in bureaucratic
symmetry more than suffices. But Mr. J. H. Thomas,
M.P. .'' This gentleman is Secretary of a great Trade
Union, which demands control. Did it not occur to Mr.
Thomas that if control for the railwayman is desirable,
it is also desirable for the civil servant ?

The terms of reference of the Machinery of Govern-
ment Committee do not preclude the discussion of
control ; on the contrary, it is distinctly implied. It
is charged " to advise in what manner the exercise and
distribution by the Government of its functions should
be improved." Since the Committee knew of these
Service associations, knew that they aimed at more than
mere salary, aimed at definite status, I am reluctantly
driven to one of two alternatives : either the question
was too ticklish or the Committee advocates govern-
ment from above. The second alternative is probable,
because the power of the Treasury is not only endorsed,
but its extension recommended. As we have seen,
the dispersion of Treasury control, carefully retaining
Treasury supervision — the supervision to which respon-
sible accountancy is entitled — is a condition precedent
to democratic control. As affairs have developed in the
Civil Service, the decisions of the Treasury become the
fiats of an oligarchy.

We cannot too carefully distinguish between control
in the workshop and control in the Civil Service. The
former is an economic method, which in Guild organisa-
tion would solely pertain to the jurisdiction of the Guild
Congress ; the latter pertains to State government and
is in an altogether different category. Workshop control
is compatible with private capitalism, but is essentially
transitional in character, being deliberately designed as
the first step towards self-government in industry. But

312 NATIONAL GUILDS AND THE STATE

control in the Civil Service is not transitional in the
same sense, since the continuance of State government
is predicated. Nevertheless, the two have pomts in
common, notably in discipline and in the disbursement
of money allotted for such definite purposes as come
within the competence of control. Thus, the alternative
to Treasury control is a responsible committee, who shall
undertake, on behalf of their colleagues (by whom they
have been democratically chosen), to do certain work
or perform certain functions, on the terms and at the
cost agreed between the parties concerned. There is
no reason why the Minister of a Department should
not obtain from Parliament a vote to cover the year's
expenditure. That is the theory upon which we are
supposed to proceed. The Treasury should, of course,
criticise the Minister's estimates. There are, however,
overwhelming reasons why the Treasury should have
no power of veto, whether in form or substance. This
veto rests upon the formal threat, largely theatrical, of
the Chancellor of the Exchequer to resign if his veto be
disregarded. If the Commons choose to spend more
upon public health or education than the Chancellor
thinks necessary, then let the Chancellor accept the
decision and proceed to levy the required taxes. In no
other elected body does the Treasurer (or Chancellor)
assume such prerogatives. It is a dangerous anomaly
in a democratic system and should be determined. If,
then, we give each Minister free access to Parliament,
undisturbed by the Chancellor's threats of resignation,
and if the Minister gets his vote, it remains for the
Treasury to see that the money so voted is properly
spent, whilst it remains for the Minister and his staff,
from the highest to the lowest, to control the expenditure
of the money voted. The method suggested is by
committee and conference — a method in which civil
servants have already acquired considerable proficiency.
Finally, to avoid a scramble in Parliament, let an inter-
departmental committee meet and, in consultation with

THE CIVIL GUILDS 313

the Chancellor, agree upon the approximate amount of the
Budget and the relative proportions to be assigned to each
Department. The comedy of the Chancellor sitting upon
Parliament's head in mistake for its purse is now stale and
unprofitable. It is, indeed, too tragical to be amusing.

There remains to be considered how far the Civil
Service is ripe for self-government and susceptible of
Guild organisation.

IV. A Civil Service Guild

We can now see, I think, that there must be a
solution of the vexed question of Treasury control
before the Civil Servants can achieve any measure of
democratic control. It is obvious that the one excludes
the other. The facts stated in the previous section of
this chapter warrant the conviction that efficiency comes
from professional competence and zeal and not from a
rigid system with finance as the mainspring. From
the previous section we may also infer that effective
association, the first condition of Guild organisation,
is not far to seek amongst Civil Servants. But it is
difficult for the ordinary observer to realise the extent
to which association has spread throughout the Service.
There are no fewer than -$0 associations in the Post
Office alone, some of considerable size and power
Thus, the Postal and Telegraph Clerks' Association
represents an establishment exceeding 40,000 ; the
Fawcett Association, composed of sorters in the London
Postal Service, numbering 7000 ; the Postmen's Fed-
eration speaks for an establishment of nearly 70 000 •
the Amalgamated Engineering and Stores Association
represents over 22,000 employees in that class ; the
National Federation of Sub-Postmasters speaks for
23,000. Numerically considered, these are the im-
portant bodies, but some of the smaller bodies have
their weight and significance. There are, for example
the Associations of Post Office Superintendents the

314 NATIONAL GUILDS AND THE STATE

Postal Telegraph and Telephone Controlling Officers'
Association, the Association of Head Postmasters, the
Society of Post Office Engineering Inspectors, and the
Association of Post Office Engineering Chief Inspectors,
with a membership of over 300. From the Guild point
of view it is almost immaterial whether these servants
of the State associate for technical or financial mutual
support or for both ; the sine qua non is that they shall,
with greater or less formality, be associated.^

When we reach the stage of Guild organisation, the
question will arise whether the Post Office is a civil or
industrial body. I have always recognised the difficulty,
theoretically considered, of this problem. The Post
Office, although a congeries of trades and occupations,
is an institution unique in almost every sense. It is
certainly a State enterprise, possessing peculiar legal
rights and attributes, touches our private lives as does
no other organisation, is already recognised as a State
organisation, its members submitting to the rules and
regulations of the Civil Service. On the other hand,
it is a gigantic industrial organisation, employing men
of many different trades, - who, in the ordinary course,
would join their appropriate industrial Guilds. It must
be, particularly, always in close co-operation with the
Transit and Engineering Guilds. Personally, I think it
ought to be regarded as a Civil Guild, but, as a democrat,
recognise that it must ultimately decide for itself to
remain a Civil institution or affiliate with the Guild
Congress. If we regard it as a problem in itself, we
may say of the Post Office that it might be Guildised
to-morrow. It certainly obeys the early injunction:
" When you are ready to nationalise, we are ready to
Guildise." The Post Office is not only already
nationalised ; it is organised.

' Since this was printed there has been an important development. In September
1919 the Postmen's Federation, the Postal and Telegraph Clerks' Association, and
the Fawcett Association amalgamated. The new organisation is called the Union of
Post Office Workers. Its membership is rather less than 100,000, with an annual
revenue in excess of ,^62,000. The Central London Telegraph Association also
balloted in favour of amalgamation, but at present are precluded by legal difficulties.

THE CIVIL GUILDS 315

Coming now to the distinctively Civil Service, again
we discover that the practice of association runs all
through it. There is the Civil Service Federation
with a possible membership of 15,000. There are
20 Associations in this Federation. Then there is the
Civil Service Clerical Alliance with a membership of
20,000. In this Alliance there are 10 different Associa-
tions. Next comes the Customs and Excise Federation
with a potential membership of 5500, comprised in
3 Associations. Then we may note the Civil Service
Society, to which I have already referred. Its operations
affect an establishment of over 7000. There are the
United Government Workers' Federation and thirty
or foi^ty other Associations, small but representative.
Whilst these Associations have not a membership
commensurate with their Establishment strength, it is
probable that they can speak more authoritatively for
their colleagues than in similar circumstances in industry.
The reason is that their subscriptions, being merely for
the printing and clerical work, are nominal. It is
always more difficult to collect nominal subscriptions,
for which there is no return, than substantial subscrip-
tions involving possible loss if not paid. A man does
not neglect his life-insurance premium ; he is habitually
careless in forwarding his half-crowns. I notice, for
example, that the Civil Service Society has a membership
of 1800. The action it took over war-bonuses benefited
7000. The other 5000 were apparently content. If
their half-crowns were wanted, they would doubtless be
forthcoming. The real question is : Are these Associa-
tions representative ? Do they express the views of
their particular Establishment.? Since they meet with
no dissent, and do, in fact, contain the active spirits,
we may safely assume that they say what the general, if
marticulate, body of the Civil Service thinks.

Whilst I know of no conscious tendency or movement
in the Civil Service towards a Guild, many of the classes
are looking eagerly for self-government. Mr. Monahan,

3i6 NATIONAL GUILDS AND THE STATE

the Chairman of the Alliance at its Conference, said :
" Many questions of importance agitate the Civil Service
at the present moment, but I need make no apology for
devoting some time to discussing the single question of
control ; for all the other Service matters that excite our
interest are so many roads leading us to this central
problem. We had already gone some way in the con-
sideration of the subject when the Whitley Report was
issued and public attention drawn to the similar problems
in the industrial life of the country. The remedies we
had preached for Service ills were now, as they applied
to industry generally, expounded with authority and
adopted by the Cabinet. Clearly, the welcome given
to the Report, and especially its adoption by the Cabinet,
immensely strengthen our position ; and it seems
inevitable that, in some form or another, the suggestions
of the Report must — if only for the encouragement of
the industrial world outside — be made the basis of a
drastic reform of the Civil Service. Indeed, the principles
of the Report are demonstrably more applicable in the
public service than in industry. The main objections
that have been raised to the Whitley Scheme are irrelevant
to the case of the Civil Service, just because it is the
Public Service, and there can be no question, therefore,
of a necessary conflict of interest between employer and
employed. The problem of the Civil Service is how
so to constitute it that the public interest for which it
exists may be most effectively served without the
creation or maintenance of antagonistic sectional or
private interests within it." Whether or no the Whitley
Report becomes the model, the Alliance is determined
to obtain a share of control. Its policy was defined
at its Conference, so far back as November 191 7, in
these resolutions :

I. That, in the opinion of this Conference, the controlling
authority of the Civil Service should be a Board, under the chair-
manship of a member of the Ministry, and composed of equal
numbers of {a) persons appointed by the Government and {h)

THE CIVIL GUILDS 317

representatives of employees nominated by Associations of Civil
Servants.

2. That, in the opinion of this Conference :

(i.) It should be the duty of the Board of Control, de-
manded in the above resolution i, to exercise a
general supervision over the general condition and
activities of the Civil Service, and specifically over
(a) recruitment, pay, appointment, classification,
allocation, transfer, training, promotion, and
superannuation of Civil Servants ; (b") the condi-
tions of their employment, and the division and
definition of their duties ; and (c) the fixing of
standards of office method, premises, and furniture ;

(ii.) The Board should, in dealing with all these matters,
consult with and seek the co-operation of the
permanent heads of Departments on the one hand
and the organisations of Civil Servants on the
other; and

(iii.) The heads of Departments and organisations of
Civil Servants should be in regular communication
Wfith the office committees to be constituted as pro-
vided in resolution 3 below.

3. That, in the opinion of this Conference, there should be
formed in each Government office a committee, to be described
as the office committee, of equal numbers of the higher officials
and elected representatives of the subordinate classes, which should
be charged (a) with the consideration as they afi^ect the office of the
matters generally controlled by the Board of Control, as set forth
in resolution 2 (i.) above, and their determination within the limits
allowed by the Board ; (/>) with the duty of periodical report to the
heads of Departments and organisations as implied in resolution 2
(iii.) above.

The Society of Civil Servants, representing the higher
grades, is naturally more discreet in its pronouncements.
It has taken steps, however, by resolution " to ensure
proper representation on any Councils that may be set
up if the proposals of the Whitley Committee's Report
on Industrial Reconstruction are applied to State Depart-
ments." But its methods, outlined in the previous
section, aiming at professional status, involve self-

31 8 NATIONAL GUILDS AND THE STATE

government to an even larger extent than in the proposals
of the Alliance.

It will be observed that the organised Civil Servants
look to some machinery on the Whitley model as the next
step towards control — such control as is compatible with
the authority vested in the State. The question arises
whether the Civil Service Committees here suggested
help or hinder Guild organisation. We have seen that,
in industry, there are grave objections to the Whitley
proposals, notably two : (a) that they predicate the
continuance of the wage-system, and (^) that they
circumvent workshop control. The Whitley Report
expressly declines to discuss the wage-system, whilst
its official interpreters regard the works committee as
a necessary part of the Whitley machinery. Since the
new shop-steward entertains quite other opinions as to
the function of the works committee, it is evident that
ab initio there is a fatal clash between the new industrial
movement and the schemes adumbrated in the name of
Whitley. But can these objections be maintained
against Whitley Committees in the Civil Service .'' In
the first place, the wage-system in the Service appears
in its least objectionable and attenuated form ; it is
almost completely a salariat. Secondly, there is no
private employment ; commercially considered, there is
no profiteering ; the industry — if industry it be — Is
already nationalised ; it is, in fact, the administrative
arm of the Executive, which directly derives its power
from the State. To state these facts Is to answer the
question. Undoubtedly, a Whitley Committee in the
Civil Service cannot be condemned on the same grounds
that It would be condemned in capitalist industry. The
Whitley method would tend to strengthen the position
of the rank and file, to ensure enhanced status, to Induce
increased efficiency, through the satisfaction that comes
of group control and personal amenity. Apart, too,
from any question of group or personal rights, the Civil
Service is centralised beyond reason. It is so centralised

THE CIVIL GUILDS 319

that locality is ignored and the lower ranks disregarded.
The result is unexampled congestion and smouldering
discontent. Decentralisation of power, the distribution
of responsibility through appropriate ranks and groups,
would cure, almost at a stroke, the worst aspects of
bureaucratic management. The Guildsman may, there-
fore, welcome the Whitley organisation in the public
service, even though he reject it in industry.

There is another form of the public service to which
I have not referred. The Municipal Service is in
magnitude greater than the Civil Service ; its functions,
if different, are equally important. It, of course, has
intimate relations with its Civil confreres, to whom it is
as necessary as is the Civil Service to the Government.
The Ministries of Health and Education would be
impotent without the corresponding Municipal Services.
Even the Police, although subsidised by the Government,
are under municipal control. Since the Police are
responsible for the application of the criminal law, it
is clear that, in the performance of this duty, their
function is at least as Civil as it is Municipal. A Civil
Service Guild, once constituted, would therefore have
far-reaching municipal reactions. The Medical Guild
would presumably include the Medical Officers attached
to the Municipalities ; the Educational Guild would
be a mere skeleton without the municipal teachers, who
are, in fact, Civil Servants, since, like the Police, they
are subsidised by the State ; such industrial Guilds as
the Engineering would presumably control their own
members now in municipal employment, whilst the
various technical corps would, in like manner, cut across
both the Civil and the Municipal Services. From the
strictly industrial point of view, it would seem that the
Municipalities, like the Government, must make terms
with the industrial Guilds. There is a huge army of
municipal tramwaymen. They would almost certainly
affiliate with the Transport Guild ; other industries
concerned with municipal life would in like manner

320 NATIONAL GUILDS AND THE STATE

find their economic fellowship with the cognate Guilds.
Nevertheless, pending a thorough Guild organisation,
it would seem as though there is an incipient Guild
organisation in the Municipal Service. An unknown
correspondent kindly sends me an account of the
Municipal Officers' Guild, who applied to the County
Borough Council at Rotherham for recognition as the
intermediary between the Staff and the Corporation on
all matters affecting the interests of the Staff. The
Town Clerk was instructed to obtain information as
to the attitude of other municipalities, and the Guild
was also requested to furnish any particulars of similar
practice elsewhere. The movement is probably both
local and incipient ; but it is significant.

I am not reviewing, in this chapter, the aims, objects,
and organisation of our' public service, even in regard
to its personnel and functional rights. That is a large
subject, beyond my purview.^ But the facts here cited
prove that, consciously or unconsciously, this great body
of men and women is moving in the direction of Guild
organisation : shows a keen sense of functional value :
realises the need for the devolution of centralised control,
particularly of drawing a clear distinction between
Treasury control and supervision. A Civil Service
Guild could be created with no great difficulty.

^ An excellent, objective, and well-documented history of the Civil Service will be
found in The Civil Service of Great Britain, by Robert Moses, Ph.D., B.A. (New
York : Columbia University. London : P. S. King & Son.)

VII

THE CIVIL GUILDS (continued)

THE EDUCATION GUILD

I. Education and the Teacher

The sharp distinction I have repeatedly drawn between
the Citizen and the Guildsman, between our several
duties to the State and the Guild, is found to be funda-
mental when we come to consider the function and
organisation of education. Let me recall the argument.
It is assumed that the industrial processes pass from the
political sphere to the Guilds ; that, in consequence, the
State is only concerned with the economic sequelae of
the industrial control implied in the absolute Guild
monoply of labour, adopting in fact the economic means,
supplied by the Guilds, to the spiritual ends, which
constitute the role of a purified political system. The
citizen, expressing himself in the political medium,
asserts himself through the State organisation ; the
Guildsman, as such, establishes his economic freedom
through the Guilds. It is the essential dualism involved
in at once procuring the means of life and turning life
to high purpose. In each one of us this dualism exists.
If our national economy works smoothly, is not confronted
with harsh economic conditions (such as a shortage of
natural products or waste caused by abnormal conditions),
then we can, as citizens, develop our spiritual gifts —
art, literature, science, our intellectual perceptions, all

321 Y

322 NATIONAL GUILDS AND THE STATE

that the spirit of man may achieve when set free from
stringent or impoverished circumstances. Have I written
this before ? I shall write it again. If we forget it,
Guild proposals sink to the level of mere mechanism.
Our problem is, not to establish a balance of power
between the State and the Guilds, but to enable both
State and Guilds to function freely in their appropriate
spheres. A people with a confused national economy is
of necessity handicapped in its spiritual ascent ; a people
whose economy is wisely ordered finds a straighter way
towards the higher reaches of human effort.

Obviously, in all this, education must play a tremen-
dous and determining part. It is not so obvious, however,
that, to maintain harmony between the spiritual and
economic activities, because it is a civil function, education
must devote all its energies to the culture of citizenship,
the technical training now assigned to it becoming the
responsibility of the Guilds. Just as to-day our national
life suffers from a vicious blending of the political with
the economic, so education reflects the same evil in its
subjugation to the industrial necessities imposed upon
it by a capitalism that, with criminal indifference to the
humanities, imperiously demands a class of technically
efficient wage-slaves. In this chapter, it is assumed
throughout that the function of education is to build
character, the prime essence of citizenship.

At the first blush, it might seem as though I am
wrongly assuming as a fact the major aspect of
technical training in the large volume of educational
activities. The critic may aver that, so far as primary
education is concerned, neither teacher nor scholar
knows anything of the technical ; that there are vast
stretches of secondary education in which the technical
is equally unknown ; that a boy may pass from the
primary school to the university unaffected by industrial
considerations ; that everywhere the cry is for more and
not less technical teaching. Viewed quantitatively this
is no doubt true ; but the critic must be reminded that,

THE CIVIL GUILDS 323

without the word spoken, the atmosphere of our primary
schools may be, and in fact is, technical, in the sense that
the children are prepared for industry by the inculcation
of the qualities demanded by the workshop, rather than
the virtues necessary to good citizenship, of unquestion-
ing obedience to industrial discipline instead of un-
questioning loyalty to civic principles and social honour,
of acquiescence in the existing order, of impatience and
contempt for ideals and new conceptions. The system
says in effect : " These things are not for you ; prepare
for a life of toil." In this sense the technical or material
spirit pervades school-rooms in which technical education,
properly so called, is unknown. When, therefore, I
propose to transfer the technical from our national schools
to the Guilds, I mean more than the phrase conveys ; I
mean that our schools shall be as completely swept clean
of the technical spirit as the State of its economic entangle-
ments. The one implies the other.

It was inevitable that the conditions of the school-
room should react upon the teacher. Not surprising
that, in an educational system demanding intellectual
compliance with the wage-system, the teacher, on
reaching class-consciousness, should seek the redress
of his own disabilities within the ambit of the wage-
system, in spirit as in fact ; not surprising that the
teacher should first absorb and then reflect that
respectability we associate with capitalist society ; not
surprising, if we have regard to his unique position,
that in most parts of England, particularly the rural
districts, the teacher should vie with priest and preacher
as the most cohesive factor in the social fabric. This
role is sometimes to his liking, more often it is forced
upon him by the implied terms of his appointment. If
he is not now compelled to play the church organ, he
must still play his part in maintaining a social concert
that disregards the social discords. Not surprising,
therefore, that he should aim at the improved status of
his profession by the capitalist expedient of higher

324 NATIONAL GUILDS AND THE STATE

wages, by the assumption that professional skill is
measured in coin of the realm. It is beyond dispute
that the teacher is disgracefully paid ; but can we be
sure that improved economic conditions will bring in
their train an improved status, a higher conception of
the function of true pedagogy ? It is conceivable that
better financial reward might but tend to greater skill
in riveting reactionary fetters upon the mind of the
child. I do not think so ; I am sure it is not so : but it
would be an affectation to expect from an underpaid
and undervalued profession imagination and qualities
that hitherto have proved positive disqualifications. If
the average pay of the teacher is less or only equal to
that of the policeman, we are not entitled to expect any
higher conception of the teaching profession than that
of moral policemen, of providing popular moral support
for the man in possession.

We know, however, that the best minds in the
teaching profession are in revolt against the invidious
position in which they find themselves ; that they realise
that education means infinitely more than is permitted
by Whitehall and the local authorities. I suggest that
the teacher must now decide whether it is by the
enhancement of his function or by endeavours for higher
pay that the main end can be achieved. " One discovery
of to-day," says a valued correspondent, " is that the
most important factor in education is the teacher." The
most important factor in education is education and its
content ; the teacher is the chief and most important
instrument. This, perhaps, sounds trite ; it is the
essence of the problem. It means that the function or
the social value is greater than the individual, however
great our debt to him. Thus the first stage is to evolve
a finer concept of education ; then the right teacher will
be found. But it is also true, with due acknowledg-
ments to enthusiastic amateurs, that it is the enfranchised
teacher who will make of education the social value
desired. As in industry it is our contention that the

THE CIVIL GUILDS 325

enfranchised wage-earner will become the true craftsman,
so in education it is to a self-governing teaching profession
we must look for the correlative improvement in mental
training. My correspondent proceeds : " Notoriously
the teacher is demanding at the moment to be better
paid ; but the awakening instincts behind that demand
have a deeper significance. As long as the teacher is
discontented, there is no need to despair of national
education. But the problem is to turn the teacher's
discontent into the most fruitful channels. A mere
demand for higher pay will not suffice ; the teachers
must resolutely face the problem of the nature of
education ; they can only advance their permanent
interests by improving the quality of the substance
with which they deal. They can improve their social
status ; but their professional status will remain precisely
where it is unless the quality of education marches with
their financial advance. A medical charlatan is no better
doctor because he quadruples his income ; we do not
appraise the science of medicine by the financial standing
of its practitioners, but by its contribution to health."

Nevertheless, I am anxious to avoid any appearance
of lack of sympathy with the elementary teachers in
their struggle for better material conditions. The
National Union of Teachers, with its hundred thousand
members, doubtless finds that its common denominator
is pay and conditions. Even in this respect, I imagine
it is hampered by its incurable respectability, which
still secludes it from the Trade Union Congress. It
has, of course, done wonders for its members ; but why,
after all these years, has it not forced the doors of the
great universities ? Why the persistence of the shocking
pupil-teacher system, when every middle-class child has,
if his parents choose, university trained teachers ? No
one would contend, I suppose, that the university man
is better informed than the elementary teacher, who
excels in instruction as distinct from education ; yet
who can doubt that the intellectual resources of the

2^6 NATIONAL GUILDS AND THE STATE

universities could long since have been exploited in the
interests of elementary education, had the National
Union of Teachers set about it with determination and
with a higher regard for teaching as a profession ?
Nor can I understand why this powerful union has so
tamely submitted to the mechanism of their schools —
the mechanism of the inspectorate, of grants and all the
hateful concomitants of the factory in the schoolroom.
One is reluctant to conclude that the leaders of this
Union believe in their hearts that the wage-earners'
children get very much the education best calculated to
preserve the existing social system.

I return to my correspondent, who is himself a
teacher : " On what theory of society are our schools
founded } Our more fashionable boarding and day
schools frankly profess, with a certain success, to turn
out ' ladies and gentlemen,' fitted for leadership in
society, for the higher professional, commercial, and
diplomatic posts, or to become what a recent official
report refers to as ' captains of industry.' But our
State schools show no contrast of democratic bias.
They are not the training grounds of republicans and
levellers. They have no coherent theory. They rise no
higher than a pitiful imitation of the school traditions
of social superiors. Our elementary scholars are turned
out fitted to be nothing better than wage-slaves. They
are not even trained to be efficient wage-slaves. The
whole system is chaotic, aimless, depressing. To give
one exceptional child in a thousand free education from
primary school to university is no atonement for bungling
the education of the others." This picture of a State
school, by a teacher, might here and there be refuted
by the exceptional ; in the main, I fear it is a true
indictment.

" We have a large heritage of educational theory,"
he says, " but there has been relatively little successful
practice. There is among us to-day a considerable
amount of serious thought and fruitful experiment,

THE CIVIL GUILDS 327

notably by educationalists favourable to the Guild idea.
Must their work be barren of adequate practical result ?
One thing alone is lacking : an organisation wide
enough and intelligent enough to encourage theory,
systematic experiment, and put the successful result
into practice. Teachers must recognise that they will
never gain their proper position in society if their efforts
are confined to the improvement of salary and status.
The claim to the position of expert must be substantiated
by readiness and ability to work out in practice the ideas
of the great educational reformers. In return, the
public must be willing to give teachers every freedom
and every opportunity for which they show themselves
to be fitted."

Yet one more quotation from my correspondent's
memorandum : " Public interest in education is largely
misdirected. A school is looked upon as a kind of
business, which must produce a regular and tangible
dividend. Such ideas of control tend to influence the
detail of method, where complete freedom is neces-
sary, and in consequence to neglect the larger strategy
of educational aim, where co-operation between the
school and society is essential. A school is built like
a factory : the average play-ground is as dismal as the
back court of a slum tenement : school hours are im-
movably fixed, like factory hours : the results are esti-
mated in terms of money grants, money scholarships,
examination results. The headmaster of a school is
regarded as a kind of factory manager, screwing out
' results ' instead of profits, inflicting untold injury in
the process. The wrong things are expected of him ;
his life is busy but misspent. His autocratic position
is good neither for himself, his colleagues, nor his pupils.
The school with the most minutely regulated routine
is popularly regarded as the best school. Yet every
teacher who has a living sense of values knows that
any course or curriculum, if repeated in detail many
times, becomes dust and ashes, unutterably tedious

32 8 NATIONAL GUILDS AND THE STATE

to teacher and pupil. Enlightened teachers ask for
experimental schools. The purpose of a school is to
make experiments in life, not to break in beasts of burden
to passive tolerance of a mechanical existence. . . ."

Such, in rough outline, is the problem of education
and the teacher. Now I would as soon blame the
wage-earner for quantitative production as the teacher
for the gross materialism of the existing educational
system. But just as the time has come for organised
Labour to change the industrial system and refine its
products, so, too, the time has come for the teacher
to change the educational system and refine its spirit.
He must assume responsibility some time ; he cannot
perpetually ride off on the plea that he gives the public
what it wants. At what moment must that responsibility
definitely become his ? Precisely when he realises that
he is a member of a great profession ; when that pro-
fession is more to him than popular clamour or monetary
reward. In fine, when he adopts the functional principle.
In the preceding chapter we saw that the leaders of Civil
Service organisation have begun to transform their
occupation into a profession, and to base their claim
upon skill and knowledge rather than upon -their labour
monopoly, although, of course, alive to the bargaining
value of organised monopoly. The moral is for the
teacher. He must learn that his profession is greater
than himself ; that in demanding ample aid and oppor-
tunity for the development of educational theory and
practice in the interests of citizenship, he is in reaHty
pursuing the path that leads to his own personal honour
and security. First and last, his profession must come
first ; but he goes with it. And who but he shall
control it ?

II. Secondary and University Education

We may say, I think, of all forms of secondary educa-
tion that whilst, educationally considered, they present

THE CIVIL GUILDS 329

many hopeful features, they necessarily take their colour
from the elementary. This must be so, since it is from
the elementary they draw their scholars.

University education, the crown of the edifice, is a
matter of profound importance to our national life. I
have asked Mr. Robieson to relate University life to
the Guild idea. With the technical aspects of this
most valuable contribution, I, as a non-academical, can
express no useful opinion. He reaches, inter alia, three
conclusions that concern me as a citizen. In the first
place, he demands a sane decentralisation of University
activities. Adopting the provincial aspect of local
government, already discussed in this book, he would
assign to each province its own University. To this
University would flock the provincial students, who —
as we shall see — would be no longer eligible for the
ancient foundations, Oxford, Cambridge, St. Andrews,
and perhaps one or two others. But Mr. Robieson will
have none of the straggling, struggling, misshapen,
haphazard, inadequate contrivances we know to-day as
provincial Universities. He bids us think in terms of
war expenditure, and does not shrink from, say, a week's
war-cost devoted to the reconstruction of education
in general and the Universities in particular. He
wants a fabric architecturally worthy of the purpose,
and — this is the second point — he insists upon the most
liberal adoption of the hostel system. I suppose that
nine out of every ten Oxford or Cambridge graduates
will readily affirm that they gained more from the social
conditions of residence than from the lecture-rooms.
If the system is good enough for the sons and daughters
of the rich, it is equally good for all. A non-residential
University is a misnomer. Thirdly, Mr. Robieson
would reserve the old foundations for post-graduate
courses, by those who qualify in the provincial Univer-
sities. The ancient Universities, the property of the
nation, the heritage of the centuries, must revert to
their original purpose — sanctuaries for those who would

330 NATIONAL GUILDS AND THE STATE

apply themselves to learning. I express my grateful
acknowledgments to Mr. Robieson.^

III. The Teacher and Control

He who would rule others must first govern himself.
This, self-discipline, if the platitude may be pardoned,
springs from self-respect and pride in one's calling. The
profession of teaching calls for this discipline in excep-
tional degree. If, in the preceding section, the life of
the teacher has been presented in drab tones, it does
not follow that his soul is as drab as his surroundings
are dismal. It is not, therefore, surprising that with
the sense of power derived from association the teachers
are feeling their way to a code of conduct befitting their
professional status. The Scottish teachers have begun
to put it into words. The Professional Etiquette Com-
mittee of the Educational Institute of Scotland has
drawn up a Code, which appears to have met with
general acceptance. It is as interesting as it is significant.
This Code, we are told, " must not be regarded as a
rigid body of law. . . . The ideal Code would consist
simply of principles, and individuals would be left to
their own sense of what was right or wrong in applying
these principles. But such a Code presupposes perfect
human beings, and teachers are no more perfect than
the people with whom they have to deal in their pro-
fessional capacity." So the authors seek a happy mean
between abstract principle and specific acts. The
Code " necessarily falls short of the professional ideal
in many respects. Only such articles can be included
as are likely to be accepted by practically all teachers,
or are capable of being enforced by the general will.
Many teachers, for example, would gladly see an absolute
prohibition of canvassing, but, under present conditions,
all that is practicable is to veto certain specially objection-
able forms of canvassing." Only the nation that pro-

^ See Appendix.

THE CIVIL GUILDS 331

duced the Catechism could have evolved with such
thoroughness this guide to professional good conduct.
I can only quote here a few of the main heads :

I. Relations with pupils.

II. Relations with parents of pupils.

III. Relations with the school.

The teacher is under obligation to do everything
possible to promote the corporate interest.
It is a Breach of Professional Etiquette :
Not to take a reasonable share in all those voluntary
activities (such as school-games and societies) by which
a proper esprit de corps is fostered and developed.

IV. Relations with other Teachers.

The teacher is under an obligation to develop the
sense of common interests among all classes of teachers,
and to behave to fellow-teachers in a worthy professional
manner.

It is a Breach of Professional Etiquette :

To treat members of the staff otherwise than as
colleagues.

To criticise or censure a teacher in the presence of
pupils or other teachers.

Not to carry out the instructions of the headmaster
in a spirit of good-will.

To give confidential information about the work or
conduct of fellow-teachers to outsiders.

(Under this heading there are thirteen defined
breaches.)

V. Relations with the Local Educational Authority.
The teacher is under obligation {a) to give loyal and

faithful service, and {B) to exact proper respect for the

rights of the profession.

It isja Breach of Professional Etiquette :

To 'allow the local educational authority without

protest {a) to prescribe in detail what is to be taught in

33^ NATIONAL GUILDS AND THE STATE

any subject (e.g. by the imposition of a syllabus which
has not been drawn up in consultation with the teachers
concerned), or (F) to lay down regulations with regard
to methods of instruction and discipline.

To allow the local educational authority to exact any
form of service, either inside or outside school hours,
not directly connected with the ordinary work of the
school.

To employ extra-scholastic influence (e.g. Church or
political connections) in furtherance of claims for appoint-
ments or promotion.

VI. Relations with Inspectors or other Officials.
It is a Breach of Professional Etiquette;

To tolerate without protest any discourtesy on the
part of officials.

To allow dictation with regard to the details of what
is to be taught or with regard to the methods of instruction
and discipline.

VII. Relations with the Educational Institute.

These need not detain us ; they naturally provide for
corporate loyalty.

The enforcement of this Code is naturally a ticklish
affair. In ordinary cases it must " depend upon the
professional conscience of individual teachers, quickened
by the judgment of colleagues." In obvious breaches,
" pressure from fellow-teachers may be expected to be
brought to bear on offenders (i) by express criticism of
unprofessional acts ; and (2) by some form of social
ostracism." VV^e gradually work up to the climacteric
of formal penalties. Not much can be done, however,
" until such time as the profession controls the register
of qualified teachers." Here we come to the root of
the matter.

The Code affords rich tillage for the humorist or
cynic. There are palpable crudities ; but if we read it
with sympathy and understanding, we see a profession,
too long underrated, bestirring itself : we witness a

THE CIVIL GUILDS 333

declaration of independence. "It is a breach of pro-
fessional etiquette to allow the local educational authority
to prescribe in detail what is to be taught in any subject."
" It is a breach of professional etiquette to allow dictation
[by Inspectors or other officials] with regard to the
details of what is to be taught, or with regard to the
methods of instruction and discipline." Function is
here tentatively defined ; the functional principle is
applied. Does the doctor permit the community " to
prescribe in detail " ? Why, then, should the teacher ?
The one cures disease, the other ignorance. Like the
doctor, the teacher awaits his mandate from the State.
The terms being settled, the teacher demands freedom
of action. To obtain it, he applies, if necessary, his
monopoly of labour. His mandate is to teach. He
will teach in his own way. Of course, it is not so simple
as it looks ; the inculcation of knowledge carries us
far beyond the four walls of the school-house ; there are
specialists who are not teachers in the technical sense,
but whose knowledge is requisite: nevertheless, taking
the broad view, teaching is the teacher's profession,
special circumstances being subsidiary.

In this Code, as in other pronouncements, we perceive
the Guild spirit spreading amongst the teachers. The
practical question is whether their organisation marches
with the idea of self-government and definite function.
The National Union of Teachers is obviously the most
important body, and no Guild could conceivably come
into being without its intellectual assent and practical
support. Hitherto, as we know, its policy has been to
seek improved status by higher salaries and better
conditions. This policy has been largely forced upon
it by stress of circumstances. Its members were
criminally underpaid ; they worked under morally
exhausting conditions ; they were subjected to the
tutelage of a calculating Whitehall in conspiracy with
ignorant and cheese-paring local authorities. But this
particular batde has now been fought and won ; the

334 NATIONAL GUILDS AND THE STATE

elementary teacher can call his soul his own, even though
he put it in pawn to the social conventions. The next
stage is to round off the earlier work by the conscious
creation of a profession with professional rights and
amenities. The elementary teachers have yet to declare
that their functional competence will keep pace with
the advance of their social status. Unless this be done,
speedily and thoroughly, we may witness the spectacle
of the teaching profession, enriched by universal consent,
becoming the bulwark of a deliberately contrived
obscurantism, the most effective ally of the exploiting
classes.

In any event, the National Union of Teachers,
although numerically the most powerful, is not by its
constitution the appropriate nucleus of the Education
Guild. We must bring in the secondary teachers of
every grade and category in addition to the University
teachers, tutors, and professors. There must be an
organisation common to all. This will be found, I think,
in the Teachers' Registration Council, a body consist-
ing of a Chairman and forty-four representatives ap-
pointed by associations of teachers. Eleven of these
are elected by the Universities of England and Wales,
eleven come from associations of teachers in public
elementary schools, eleven from the secondary schools,
and eleven from the various associations of special
subjects (technology, art, music, domestic science).
Every member of the Council must be a teacher or a
former teacher. The Council does not work in rivalry
with existing organisations ; it unifies on the higher
plane of function. It already has a legal recognition.
It is authorised by the Education Act of 1907 and
established by an Order of the Privy Council issued in
19 1 2. These enactments assign to the Council the duty
of forming and keeping a Register of such teachers as
satisfy the Conditions of Registration estabhshed by
the Council for the time being, and who apply to be
registered. All names registered appear in alpha-

THE CIVIL GUILDS 335

betical order and in one column. In the first five years
of its existence, more than 20,000 teachers have appHed
for registration.

Evidently duties other than registration are contem-
plated. The President of the Board of Education in
1 9 1 2, at the first meeting of the Council, hoped that the
Council would be able " to speak with one voice as re-
presenting the teaching profession and that the Board
of Education would be able to consult with them."
The Council itself declares that " the Register is only
a means to an end, namely, the establishment of a
united teaching profession. . . . Unity is the first
condition of progress towards a larger measure of self-
government for teachers, and this self-government in
its turn begins when teachers themselves have agreed
to maintain a Register of those qualified to practise
their calling." As we have seen, the Scottish teachers
realise that they cannot, in the last i-esort, enforce dis-
cipline until they can control their own Register.

We can say of this Registration Council that it is a
Guild in embryo. Its composition is perhaps open to
criticism. The overwhelming majority of teachers are
in the Elementary Schools, yet their representation is
less than one-quarter of the Council. Experience will
doubtless rectify this or other inequalities. Certainly,
the numerico-democratic method does not apply in
education, where special qualifications and individuality
are peculiarly in request. But, in broad outline, this
Council is essentially the representative teachers'
organisation. We must remember, however, that it
has a difficult road to travel. Not only must it negotiate
with the State but also with the local governing
authorities ; it must also call to its support all citizens
who appreciate the value of education and the dangers
of a misdirected educational organisation. The right
guidance of the educational machine is of vital civic
importance. Like other Guilds, the Education Guild
must have its labour monopoly and a long tradition of

336 NATIONAL GUILDS AND THE STATE

practical training ; but, unlike other Guilds, knowledge
— the thing it deals in — is no monopoly : belongs to each
member of the community in varying degrees : is the
one factor in national growth in which men and women
of good-will can most effectually co-operate with the
distinctively professional elements.

With one more turn of the wheel, the Education
Guild could become an accomplished fact.

VIII
THE CIVIL GUILDS {continued)
THE MEDICAL AND LEGAL GUILDS

I. The Medical Guild

The existing medical and legal associations already
possess, in certain degrees, two essentials of Guild
organisation : subject to an important exception, they
have a monopoly of their own labour, and, to a striking
extent, statutory rights of self-government. Moreover,
the medical service, even as it is to-day, obeys the func-
tional principle : is probably of more permanently
functional value than any other profession or trade :
will be less affected by social change. The functional
value of the legal profession is, of course, more prob-
lematical. Unlike medicine, law — particularly its
chancery side — must necessarily be profoundly affected
by an economic change that revolutionises the terms and
tenure of possession. Medicine therefore calls for little
criticism, whilst the future of law is too speculative for
comment when my theme is transition.

The future of the medical associations, as they
develop into a civil Guild, would appear to be mainly
in the extension of self-government. At present the
medical profession exercises large powers in medical
jurisprudence — powers based upon a special knowledge,
largely acquired at the expense of the public — with a
definite code of discipline and professional conduct

337 z

338 NATIONAL GUILDS AND THE STATE

defined by law. It is possible that " infamous " or
unprofessional conduct is too rigidly interpreted ; that
professional interests are too narrowly regarded ; but,
on the whole, we may say that the powers of discipline
conferred by law upon the great medical corporations
are not seriously abused. So far as I know, medicine
is the only occupation whose " blacklegs " are legally
recognised and forbidden to practise. A disbarred
solicitor can be employed as a lawyer's clerk. He loses
status ; he is not absolutely excluded from his profes-
sion. But a doctor, once broken on the professional
wheel, cannot without risk give advice or prescription
for a fee. So far as discipline is concerned the medical
organisation certainly exercises self-government to an
extent far beyond that of any professional or industrial
body. In that direction self-government can go no
further. It is when we associate public policy with
medical practice that we discover the hiatus between the
existing medical organisation and a National Guild.

Let us suppose that our medical service costs the
nation ;^ 100,000,000 a year. This is paid through
three main channels : {a) by the State or Municipality,
largely for preventive work ; (J?) by insurance societies ;
and (c) by private payments. The tendency in recent
years has been to lift the charge from (c) and transfer
it to (b), whilst the preventive work charged to {a) has
materially relieved the burden upon both (F) and (c).
In addition, our hospitals are almost entirely maintained
by voluntary contributions — a shocking state of affairs
from every point of view. The Medical Guild will
become an accomplished fact when it receives from the
State this ;^i 00,000,000 upon the terms laid down in
its charter.

It is implicit in Guild doctrine that the Guildsman
must be maintained in sickness, as in unemployment or
old age. Logic and convenience carry us a stage further
and suggest that the Guilds should also pay for medical
care and treatment. Since the Guildsman 's pay is no

THE CIVIL GUILDS 339

longer based upon either a commodity valuation or bare
subsistence but upon a recognised standard expressing
in material forms the degree of civilised life to which
we have attained, it follows, in common sense if not in
logic, that the Guildsman's family should equally benefit.
This means the dissolution of all existing friendly societies,
so far as medical risks are concerned, and the assumption
by the Guilds of these and similar responsibilities. It
might, accordingly, be argued that each Guild ought to
pay direct to the Medical Guild its quota of the annual
expenditure upon public and private health. Apart
from the fact that public policy must play an important,
if not a dominant, part in medical administration, such
an arrangement would confuse preventive medicine with
ordinary curative practice. Public health is undoubtedly
a civil function ; it is evident that it must take into its
purview the health of the private citizen. It can hardly
be doubted, I think, that events are shaping in this
direction. The recognition of trade unions, under the
Insurance Act, as friendly societies, paves the way for
future Guild liability for medical treatment, whilst, in
the case of venereal diseases, the State has been compelled
to provide free treatment. If venereal disease, why not
tuberculosis .'' If tuberculosis, why not zymotic com-
plaints ? If zymotic complaints, why not dental treat-
ment ? Where, in fact, can we stop .'' Again, a Guild
might reasonably object to a direct charge upon its funds
for venereal treatment — a moral issue being raised, —
whilst it would gladly pay handsomely for the cure of
a consumptive Guildsman. But from the point of view
of the public health, it might be (and almost certainly is)
more urgent to cure a case of syphilis. We cannot, in
fact, distinguish ; it is safer and vastly more convenient
to refer the care and cure of all ill-health to the Medical
Guild functioning as an arm of the civil administration.
Not the least sensible of Chinese customs is the payment
to the family doctor only during good health. In our
own way we may come to it.

340 NATIONAL GUILDS AND THE STATE

Another reason why medical practice should be
regarded as a civil function is that ample provision must
be made for research and experiment. There is, for
example, the development of orthopaedic science. As
yet it is in its infancy ; I am not sure if, both humanly
and industrially considered, it is not the richest medical
legacy bequeathed by the war. As I write, there are
at least six orthopaedic hospitals, all improvised during
the war, treating war victims. Four of these are main-
tained by the War Office ; one is largely at the cost of
a Messrs. Pilkington & Co., of St. Helens ; the sixth
has just been organised as a friendly society. Unless
these military orthopaedic hospitals are retained for
industrial cases, the loss will be incalculable. Yet who
is there to maintain them unless it be the Ministry of
Health ?

There is a curious contrast between our national
approach to the problems of education and medicine.
The ancient aphorism of a good brain in a sound body is
no doubt true enough ; it suffices if we declare that
education and health are equally important as social
factors, whilst, if the psycho-analysts have substance in
their theory, it follows that a closer co-operation between
the teacher and the doctor is both desirable and inevitable.
Prior to 1870 both were relegated to the family, neither
State nor Municipality being greatly concerned. From
that date down to to-day the community has decisively
intervened in education to such an extent that the over-
whelming majority of teachers are now public servants.
Intervention in medicine has been much more cautious
and tentative, the interests of the family doctor or general
practitioner being most carefully protected. Why then
were not the interests of the family teacher guarded, with
equal consideration .'' In one respect they were : the
great middle and upper class foundations are very much
what they have always been, with voluntary — or rather
involuntary — developments on the modern side. But
" education for the masses " has become a State respon-

THE CIVIL GUILDS 341

sibility and charge, whilst " health for the masses,"
outside preventive medicine, has been largely left to
voluntary effort. From the domestic point of view the
man who looks after our health is on the same footing
as the man who teaches the children. The State pays
one ; the family or the friendly society pays the other.
Why this difference of treatment ? And why the marked
difference in social status .'' The reason can only be
that the doctors organised in advance of State interven-
tion and were therefore able to dictate their own terms
(notably in the case of the panel charges), whilst the
organisation of the teachers has painfully lagged behind
State intervention. Thus in science, as in industry, we
discover that professional status is closely associated with
organisation. But the doctors are now learning by
experience that their devotion to laissez-faire is gradually
placing them in a false position. They must soon
choose between service under the friendly societies or
service under their own self-governing Guild.

We can now return to our arbitrary estimate of
;^ioo,ooo,ooo as the annual cost of the medical service.
Under what conditions should this fund be administered .'*
Since the money comes from the State and public policy
is involved, it is evident that the State must be adequately
represented upon the governing authority of the Medical
Guild. But, further, since the funds come from a
State levy upon the industrial Guilds, clearly they too
must send their representatives. Yet further, if the
industrial Guilds are to be represented upon the Medical
Guild, reciprocally Medicine must be represented upon
the Executives of the industrial Guilds. Nor is this a
purely formal arrangement. On the contrary, I imagine
the medical representatives upon the industrial Guilds
would devote their time and skill to the diseases, ailments,
and accidents more or less peculiar to the particular
industries to whose Guilds they go as delegates. The
functional principle operates. We find, therefore, that
the principle of exchange of representatives upon the

342 NATIONAL GUILDS AND THE STATE

governing authorities, already predicated in Guild organi-
sation, is equally applicable to the civil Guilds. We
merely give effect to the constitutional doctrine of repre-
sentation with taxation.

Transitionally considered, the recent organisation of
the Ministry of Health, with its collaboration in work
of doctors with public servants, may be regarded as a
definite step towards a Medical Guild.

II. The Legal Guild

Unlike medicine, which knows neither rich nor poor
(whatever its practitioners may do), law must be modified
by such far-reaching changes in the foundation of
society as are adumbrated in wage-abolition. To lose
control of the labour commodity obviously cuts at the
roots of existing proprietorship. Law must change its
face in harmony with the gathering mastery of Labour
over its own activities. From such a revolution emerge
new concepts of property, new citizen rights, and a
complete reversal of industrial practice. It will be the
business of the lawyers to give effect to all this. Their
first task would seem to be to codify such law as remains
applicable, consigning obsolete law to the lumber-room.
Equity will, of course, remain for legal definition. Even
the criminal law must be brought into line with the new
scheme of life. It is not, therefore, possible to write
of the future of law with the same assurance that one
writes of the future medical organisation.

There is one important distinction between the
medical and legal associations. The bulk of the work,
all of it in fact except the dispensary, falls upon the doctor
personally ; the routine of legal work falls upon the
lawyer's staff, of whom very few are qualified solicitors.
The apprentice, no doubt, has his place and his assured
future, but the clerks are, after all, only clerks. It is
often said that the legal profession is a highly organised
trade union ; it is not, because it sweats its employers

THE CIVIL GUILDS 343

in a way no bona fide trade union would tolerate. It is
really a close corporation. One half of it is purely com-
mercial, actuated by commercial principles, the other
half links it up with the judiciary. Both solicitors and
barristers are, I think, technically " officers of the court."
This brings them under both the jurisdiction and pro-
tection of the judges of the High Court, in whom resides
the power to strike off the rolls. But the clerical staiF
remains little more than a group of isolated wage-slaves.
From the Guild point of view these distinctions in
status between the professional and non-professional
personnel are fatal. The essential element in a National
Guild is that it shall include all the workers, from the
highest to the lowest. In the Legal Guild, therefore,,
every man and woman engaged on legal work, from the
Lord Chancellor to the most obscure clerk, including all
officers of the Courts, not omitting tipstaffs and bailiffs,
must be received into Guild membership, with rights of
maintenance in sickness, old age, and unemployment not
less than in the industrial Guilds. The solicitor's clerk,
living in skimped and squalid surroundings, with a
pathetic pretence of respectability, is a favourite subject
of the mid- Victorian novelist, notably Dickens ; mutatis
mutandis, he persists to-day. If we have eyes we can
see him in Mr. Galsworthy's Justice, a figure as tragic
as the convict himself. The clerk in the Second Division
of the Civil Service, financially safe, is miles removed
from the struggling lawyer's clerk, with his sleeve-cuffs
cut to the quick. Yet this legal serf deals more authorita-
tively with affairs of life and death than any Second
Division clerk. Nor must we forget that the clerical
staff in the legal profession probably outnumbers the
" admitted " members. It is evident that the existing
organisation must be consolidated into a more definite
unit before we can contemplate a Legal Guild. Unless
this be done before the industrial Guilds come into
being, lawyers and their followers may find themselves
the pariahs and blacklegs of society.

344 NATIONAL GUILDS AND THE STATE

Of the function of the lawyer in Guild organisation
it is impossible to write with any confidence. The
immense transactions between the Guilds must involve
contracts demanding the help of the legal mind if not
of the professional lawyer. No doubt arbitration will
to a large extent substitute resort to the Courts. A new
body of law must be created for which legal experts will
naturally be required. It looks as though each Guild
will have its own legal staff, very much as the railway
companies and great corporations have them to-day.
But they will still be lawyers, with such affiliations as the
organisation and practice of law demands. The im-
mediate point is that a profession so partially organised
will not meet the Guilds on equal terms : must, in
consequence, suffer for a conservatism, which reckons
on judicial protection rather than upon its functional
value, backed by its organised labour monopoly.

IX

FINALLY, I BELIEVE

In National Guilds our theme was simple : to analyse
the wage-system, reduce it to its elements, in the pro-
cess to denounce, as repugnant to human nature and
sane living, the commodity valuation of labour : to
present in rough outline an alternative organisation,
which would enable Labour to function in its true
industrial medium and citizenship to find its freedom
in a State untrammelled by economic " pulls " and
interests. My theme in these chapters has been equally
simple : to consider the relations between producer and
consumer and their joint relations to the State : to
distinguish the economic means from the spiritual end,
in the process deducing the sovereignty of spiritual
citizenship over the industrial activities, the former
expressing itself in a purified State organisation, the
latter in the economically enfranchised Guilds. The
argument in both these books can be stated in even
more explicit terms : it is the cry of the human heart
for freedom in the spiritual sphere unvitiated by material
considerations, for freedom in industry measured in
the natural democracy of functional values. Viewed
theoretically, the second part of this book is supple-
mentary. It is a vague and inadequate sketch of certain
social and industrial developments, to test the truth of
the doctrine in reality. Seldom has the inductive method
proved so lacking ; for even in the short space of time
taken in the writing, the narrative already lags behind

345

346 NATIONAL GUILDS AND THE STATE

the accomplished facts. The curtain falls on one
denouement after another, is raised again on the drama,
falling and rising in such rapid succession that historian
and critic vainly strive to keep pace with each new
situation staged by an unsleeping Fate. But what is
written is written ; the subsequent events do not invali-
date its substantial truth.

The simplicity of the argument would prove its
undoing did we not hasten to declare that its application
to political and economic life is extraordinarily difficult,
so beset with obstacles that the pen of the advocate
droops in sheer despair. Only a fool thinks he can
resolve the complexities of modern civilisation in simple
and logical formulae. In the long run, I do not doubt —
it is the first article of my creed — that a true analysis
and a reasonable scheme of life will come into their
own ; that mankind must ultimately ease its pain in
truth and reason. So tortuous, however, is the path
our people must tread, so alluring the byways, so
perplexing the direction, that our seers are blind and
the prophets speak with bated breath. Not for many
generations, if ever, has the British nation been con-
fronted with so elusive a problem. Necessity compels
it to break with the past, to reconstruct its economy in
the midst of a world in part devastated, everywhere
impoverished, by the most stupendous war known to
history — a war whose effects are felt over the five conti-
nents, its reverberations heard across the Seven Seas.

When the links with the past are snapped, we at least
know that we must rebuild. But that is not our case.
In other countries, the economic mould is broken and
life sinks aimlessly in the sands ; with us the mould,
if strained, remains intact. Foreign observers comment
with surprise upon the tenacity of British capitalism. Our
own capitalists, I believe, look to another cycle (perhaps
fifty years) of economic dominance. Nevertheless they
are putting their house in order with suspicious alacrity.
The railway magnates and mine-owners are now thinking

FINALLY, I BELIEVE 347

more of compensation than continuance ; they realise
that judgment has gone out against them. That sounds
simple ; it is not so simple. The mines and railways
are jetsam thrown from the capitalist ship, with the
requisite quantity of political oil to still the surging
waves. Capitalism rather than Labour is the gainer,
unless the Guild principle of control marches with each
act of expropriation. Clearly the end of British Capital-
ism is not yet. I think it thrives on the debacle we witness
in Europe. " Look on this picture and on that,"
exclaim its apologists, who are not slow to appeal to
the British practical genius with its undoubted fondness
for historic continuity. Thus, whilst we must break
with the past, its fangs grip and rip each hour of the day.
From such an impasse, at once spiritual and material,
what liberating principle shall rescue us } None is
known to me save only in a purified citizenship working
in harmony with a democratised industry. To that I
add that a democratised industry that tolerates the
wage-system is a contradiction in terms, a prostitution
of democracy. In the midst of much that discourages,
with reaction gathering its forces in Parliament and
Caucus, in Bank parlours and counting-houses, with
the Labour Party sharing, with tragic gusto, in the
conventional political stupidities, this faith of the Guilds-
man carries him on. Sieglinde, so wearied that death
were welcome, on Brunnhilde's assurance that she
bears in her womb a future world-hero, escapes from
Wotan's vengeance, toiling with wounded feet across
the rocky slope. In some such spirit, the Guildsman,
convinced beyond peradventure that power springs
from below and not from the self-constituted leaders
of existing society, that Labour lies prostrate, that its
industrial shackles must be struck from it, patiently
pursues his mission, with invincible faith in the ftiture
of a real democracy. If, over considerable tracts of
our national life, the ancient landmarks remain, at least
the old signposts have rotted away and fallen. It is

348 NATIONAL GUILDS AND THE STATE

the Guildsman's task to replace them. They will point
a new way.

The more specific difficulties that bar the progress
of Guild doctrine will be found in the persistence of
Capitalist ideology after the mechanism of industrial
democracy has come into being. The Western Euro-
pean, particularly the Anglo-Saxon, is not by nature
contemplative. He eschews ideas for their own sake,
seeking salvation in the gospel of material achievement.

For still the Lord is Lord of might :
In deeds, in deeds, he takes delight ;
The plough, the spear, the laden barks.
The field, the founded city marks.

For my part, I do not rate lightly the practical genius
that has girdled the globe with the marvels of man's
handiwork. The mistake so many idealists make is
to assume that there is nothing between the muck-heap
and high heaven ; that in looking up we can see only
the sun by day and the stars by night, blind to great
architecture, the conquest of the air, the practical anni-
hilation of time and space. In the production of
material wealth, there is ample room for imagination
and good motive, untold opportunities for service to
mankind. There is nothing despicable, but rather the
reverse, in these practical activities, could we but drive
the money-changers from the Temple. Nor is there
the least reason to suppose that our sons will not achieve
even greater things when motived by the sense of public
service instead of personal aggrandisement. All these —
and more — are implied in the Guild principle of qualita-
tive production. But herein lies our danger ; for pre-
occupation with work of such magnitude may fill our
minds to the blunting and blurring of our intellectual
apperceptions, the real source of the spiritual life.
And if we have not this, how better are we, save in
comfort and security, than under the Capitalist regime .''
But it is precisely comfort and security that Capitalism

FINALLY, I BELIEVE 349

now offers to the distracted workers. We may decline
because we think, with good reason, that it cannot
implement the contract ; our rejection is one of
mere mundane prudence, when on such a vast issue
our policy should be dictated by enduring principles.
For, please note, we have now transcended our own
frontiers, and are in touch with other peoples whose
views of life perhaps fundamentally differ from ours.
These we must meet, not with expediency, but with
spiritual understanding. To impose our mechanisms
upon others for our own convenience is but a subtle
form of exploitation, the persistence of the capitalist
spirit. We may with confidence declare that Western
Civilisation is doomed unless it explore the realms of
the spirit, finding a new perspective of life in all its forms.
Its incapacity to encounter the Bolshevist movement
with spiritual weapons is a sharp and significant reminder
that man does not live by bread alone, neither by bread
nor by organisation nor by glorified industry. We
must look under and beyond, sub specie aeternitatis.

I do not know how far I stand alone in my conception
of the spiritual State. No theocracy is intended. The
fact that the word " spiritual " is throughout used in
its secular sense disposes of that suspicion. The word
has an unfortunate history — a bad gift from the Puritans
— and a confused meaning. My dictionary in part
yields the definition I seek : " of or pertaining to the
intellectual and higher endowments of the mind."
Yet I would add to that. The pure intelligence does
not suffice ; it must be fused with those emotional
faculties that flower from the stems of faith and conscience.
It is in the fusion or interplay of these qualities that a
certain temper of mind is struck, which, given ample
room in the body politic, is precious to the community.
An old theological writer voices the idea : " God has
made a spirit of building succeed a spirit of pulling
down." " Spirit," says Locke, " is a substance wherein
thinking, knowing, doubting, and a power of moving

3 so NATIONAL GUILDS AND THE STATE

do subsist." It Is my belief that a civilised people,
unless its finer purposes are to be thwarted at every
turn, must not only provide the means for the expression
of its spiritual impulses but endow them with the only
sovereignty worth considering — the sovereignty of mind
over matter, the enthronement of reason. It is by some
such logic that I declare, without hesitation, for the
sovereignty of the State, the spiritual State. For upon
what is sovereignty based if not upon authority ? And
how, amidst the clash of the social forces, can authority
survive, unless it be the final court of appeal in the
sphere of reason ? I entreat my readers to believe that
this is not idealism run wild. The French Revolution
erected an altar, of its own peculiar design, to the Goddess
of Reason. There was, however, a fatal omission :
no medium was provided in which the Goddess could
function unhampered by the economic factors. All
through our history, we have paid lip-service to reason ;
we have never set it in the way of guiding us. Even
now, after our blood and tears, the President of the
Final Court of Appeal is Marshal Foch. India, Egypt,
Ireland do not find their difficulties resolved, their
national aspirations satisfied, in the splendour of that
gentleman's martial attainments. The universal as-
sumption seems to be that we must each exercise our
reason in our own affairs ; that there is no call for the
special organisation of reason ; that there is no vital
distinction between the restricted exercise of reason
in the concrete and the exercise of abstract reason in
public affairs. Coleridge states concisely that pure
reason is the power by which we become possessed of
principles. With apologies to Aristotle and Bacon, I
know of no other way. In our public life, how can we
move unless actuated by principles deduced from pure
reason ? The Cadi under the palm tree, the village
father at the lych-gate, may administer rough justice
by empirical rule of thumb ; but a nation of forty
millions, an Empire of five hundred millions, must be

FINALLY, I BELIEVE 351

rationally governed or it will inevitably disintegrate.
Where can it discover its rationale unless in Courts
where reason is both sovereign and vocal ? The spiritual
State is not the emanation of a dream ; it is the pre-
requisite to social reorganisation. For if, on the Guild
hypothesis, the economic functions are assigned to the
National Guilds, it follows that the State must either
secure allegiance to its spiritual status or lapse into
desuetude : must be the expression of citizenship on a
higher plane, or citizenship will lose itself in the dis-
tractions of wealth production, the spiritual heritage
of the centuries lost for ever in the final triumph of the
material forces.

The revolts against the State, now looming up from
more than one rebellious group, may be broadly divided
into two categories. There are those who contend that
the control of industry implies the moulding of public
policy. It is the materialist interpretation of history
applied to existing conditions. The second category
does not reject the idea of the State, but assails its present
sanctions. For reasons unknown to me the first group
sees in Bolshevism the fruition of its hopes. He is a
bold- man who writes with confidence upon Bolshevist
principles or methods. But, so far as the facts have
been disclosed, it appears certain that Bolshevism has
failed mainly because it has attempted to combine the
political with the economic functions. The results are
suggestive. Industrially considered, the Soviet system
is a failure. One must recognise that, in any event,
it was doomed to fail because it took over a bankrupt
concern. But Bolshevist theories were relentlessly
applied, the technical and directive classes being dis-
pensed with and degraded. It was not until production
had sunk to zero that Lenin demanded the co-operation
of the technical groups, and offered them terms. Now
in Russia, industrialism is not highly developed, com-
prising less than ten per cent of the population. It
does not possess the highly complex character of Western

352 NATIONAL GUILDS AND THE STATE

industry. Yet it is a pronounced Bolshevist failure.
What would have been the situation in Russia had its in-
dustrial proportion to population approached or equalled
Great Britain's ? One may affirm that there would
have been no Bolshevist revolution, or, alternatively,
the catastrophe would have been infinitely more terrible.
I gather, too, that out of this welter of confused functions
the political activities have also proved futile. The
Soviet was to be the last word in applied democracy ;
three or four men now govern Russia, particularly in its
external relations, with an autocratic power at least
equal to the last of the Tsarist ministers.

With the second group, led by Mr. Cole, I have
considerable sympathy. No Democrat can examine
the structure of the existing State without realising
that it is a political autocracy backed by a bureaucratic
oligarchy, both bound together by tradition, law, and,
in the last resort, by military force. The facade of this
structure is the Crown and Court. Upon the sovereignty
of this particular State, Mr. Cole and I have no kind
of quarrel. From top to bottom, its organisation is
repugnant to Guild principles. The illicit union (upon
which the State levies blackmail) of the political with
the economic functions once dissolved, we are faced
with the alternative either of the spiritual State, as
outlined in this book, or the assignment of special
functions to the new State, upon some principle which
eludes me. Some surprise was expressed when I
declared recently that, in my view, the State, although
the dispenser of functions, was itself functionless. I
adhere to this view, in the sense that specific functions
are assigned to definite bodies and associations ; but
that does not preclude the State, as the organ of citizen-
ship, possessing full freedom of movement, itself assuming
all or any functions which cannot be assigned to any
suitable organisation, — particularly in the case of sudden
emergencies : it is undoubtedly the appropriate organ
for all emergencies, great or small. I leave the subject

FINALLY, I BELIEVE 353

of the State with the simple admission that Guildsmen
and other students have as yet barely touched its fringe.
Personally, I am content if the political or spiritual
State can function iruiependently of the economic factors,
except so far as they affect public policy. As for
sovereignty, I end as I began : the citizen (voicing his
will through the State) must take precedence over the
Guildsman. I recognise no other sovereignty.

In these chapters I have tried to maintain the distinc-
tion between State and Government. The two terms
are frequently so loosely used that they seem inter-
changeable. They are less interchangeable than
" master " and " servant " ; they, in fact, connote
master and servant. The distinction grows more
urgent as sovereign citizenship broadens from precedent
to precedent, finally constituting the State, of which
the Government is the executive servant. In this
connection, too, it is equally important to differentiate
the Government from the Administration. The pre-
ceding chapters on the Civil Guilds sketch an administra-
tion in transition to Guild organisation. Unlike the
State, it is throughout actuated by the functional principle.
Unless these distinctions are kept carefully in mind, the
argument for the spiritual State becomes crooked in
outline and difficult to appreciate.

The reactions of the spiritual State upon the life of
the community are of immense speculative interest.
Assuming the release of the political activities from
economic entanglements, that, subject to public policy.
State affairs can be arranged on a basis of pure reason,
is not the way opened to new conceptions of communal
and private life .'' Shall we not then discover new canons
and principles in our relations as a community to other
peoples, in our personal relations to each other ? Can
we not predict with confidence that the habit of reason
will induce refinements of thought and conduct .■' It
is, of course, unthinkable that any nation, the British
least of all, can maintain a State organisation, set free

2 A

354 NATIONAL GUILDS AND THE STATE

to judge great issues on their merits, without vitally
affecting the economic life of the Guilds. The man
who in his capacity of citizen is trained to decide on
the intrinsic right or wrong of a public question is the
same man who, as a Guildsman, must, according to his
function, decide industrial policy with its inevitable
economic effects. Even though he decide these dual
problems on different assumptions, he retains but one
habit of mind. The one brain reaches a political or an
industrial decision : reaches each decision in a different
atmosphere and in different associations : is one man
with one brain functioning in politics or in the Guilds.
He is not two but one. Why, then, it may be asked,
these fine distinctions between the political and economic
activities, why all this elaboration of the spiritual State .''
I answer that I am not predicating an immediate or even
an ultimate reign of reason. Life is too difficult and
complex. But the very complexities that surround us
at every turn compel us to seek some method of
systematising our problems : urgently demand the
appropriate media in which we shall express our wills
and aspirations. Above all, that we must ever distinguish
between the economic means and the spiritual ends.
Means and ends necessarily react upon each other,
even though they are in different categories of thought
and action. The tragedy of modern life is that the great
mass of mankind is preoccupied with the means of life
and not with its purpose.

It is only in this richer conception of life that we
shall compass that craftsmanship which to many is the
real attraction of the Guild idea. I sometimes fear
that this interesting group puts the cart before the
horse. Relying upon the precedents of the mediaeval
Guilds, many of which (but by no means all) excelled
in craftsmanship, they seem to argue that we must first
recall the craft spirit before we can achieve a definitely
aesthetic life. Progress will be found in the influence
of intellectual pursuits upon the work of men's hands.

FINALLY, I BELIEVE 355

Craftsmanship is not only the child of joy in work, it is
equally the offspring of good taste. Good taste, in its
turn, springs from habitual touch with truth and beauty,
the imponderable fruits of culture. I do not doubt that
even now the artisan can make things, from chairs to
Guildhalls, much more beautiful if the conditions of his
work are rendered pleasurable ; but a limit is set to
the quality of the product by the general appreciation
of what constitutes fine craftsmanship. Here and there
a genius rises superior to current taste, and in doing
so may raise the standard of taste and quality in his
particular craft ; nevertheless, it is true that, even when
the conditions essential to craftsmanship have been
secured, the average craftsman cannot rise much beyond
the popular level. For the simple reason that he is as
his neighbours. Nor can we foresee what the cultured
taste of the community will be under a spiritual State,
economically based upon National Guilds. I do not
think that we shall revert to the mediaeval period|for
our inspiration. Industrial craftsmanship was undreamt
of in the days of the mediaeval Guilds ; yet it is a very
real and enduring factor in our national life. The
finest emanations of the mechanic spirit, whilst probably
repugnant to the mediaeval spirit, may yet conform to a
new sense of beauty, yielding joy to the craftsman and
pleasure to the community. Nor is it contrary to the
craft spirit that commodities — fabrics, boots, engines,
bridges, aeroplanes — should be produced by group
effort. If certain obvious dangers are guarded against
— notably intense specialisation or repetition work —
who shall say that industrial, as distinct from aesthetic,
craftsmanship is not desirable both from the social and
individual point of view ? In these pages, when using the
term " qualitative production," I include every type of
craftsman, from the artist in colour and design to the
artist in mechanical construction, from the product of
the hand to the product of the machine. How and in
what direction these various types will develop is beyond

356 NATIONAL GUILDS AND THE STATE

our ken. This at least we know : unless we can supplant
quantitative production for profit (either for personal
aggrandisement or to pay the war debt) by qualitative
production for civilised use, we shall be subjected for
another generation to economic servitude.

Of the interaction between the spiritual State and the
National Guilds, little remains to be said. The entire
burden of production and distribution being thrown
upon the Guilds and no longer shared by the State, I
believe that the heavier responsibilities will meet with
adequate response from Guildsmen, both leaders and
rank and file. The differentiation of the civil and
industrial functions will, we may reasonably expect,
lead to finer specialisation of function, with fuller oppor-
tunities to every man to exercise his true vocation. If,
as citizens, they must cultivate the habit of intellectual
sincerity, we may rest assured the same habit will assert
itself in Guild administration. The two besetting sins
of great organisations are extravagance and vainglory.
Extravagance obtains to-day because they who practise
it do not pay the price. We may say of every form of
extravagance that the classes enjoy it, but the masses
bear the cost. In the life of the Guild, the temptation
would possibly remain to certain groups. But all
extravagance is either feckless waste or ostentation.
Would not intellectual sincerity cure the disease, even
if the democratic method failed .'' In a world where
the standards of life tend to approximate, when the
community is bound together by equal social responsi-
bilities and universal obedience to functions, natural
or assigned, good taste would sternly forbid class,
group, or individual ostentation as unspeakably vulgar.
Nor need we fear the vainglory that would vaunt the
superiority of one Guild over another. Since each
Guild would know precisely all it wanted to know of
the others, no reason could be found for arrogant or
pretentious demands in Guild relations. With all its
idealism, democracy is realist. Both in State and Guild,

FINALLY, I BELIEVE 357

it will not be diverted from essential truth : will esteem
modesty in word and deed : will, by its example, teach
an exhausted world that the true regimen needful for
recovery is plain living and high thinking.

In all I have written, I have never thought or con-
tended that National Guilds would originate in altruism.
All to the contrary ; I believe that they are inevitable,
unless economic development takes a turn in some
unexpected direction. Nothing is inevitable unless
willed ; nor is it then inevitable. But an economic
course once indicated with reasonable certainty is only
diverted by a supreme exercise of national will-power.
The advent and final triumph of the great industry has
met with little, if any, opposition in Great Britain. It
is, in fact, hailed by^ the vast majority of thinkers and
writers as one of the great world achievements. Its
critics have not condemned it ah initio \ rather have
they urged modifications, mainly in the direction of
rendering the conditions of labour more endurable.
Their most humane discovery has been the economy
of high wages, a point, I think, which the modern
classical economists have not sufficiently emphasised.
Concurrently, we have had certain social reforms
deliberately intended to render the system more bearable
— factory regulations, old-age pensions, and, as a war
measure, unemployed donation benefits. These social
and financial salves notwithstanding, it is now evident
that the capitalist system, under the pressure of events,
has developed fatal defects. We now know that the
wage-system, the foundation of capitalism, has reached
its limits ; that production by wagery tends to fall ;
that all the emollients have failed to conciliate Labour,
which grows more discontented, not, as formerly, decade
by decade, but literally month by month. There is no
student of industry who, whatever his private expectations,
would deny the possibility of a revolution ; there is no
man of affairs who would deny that Labour to-day strains
at the leash that binds it to the master-class. Apart from

358 NATIONAL GUILDS AND THE STATE

its obvious defects and failures — its shocking treatment
of the labour reserve during a century of pitiless exploita-
tion, its arrogant claims upon the State for subsidies of
one kind or another, invariably followed by arrogant
sneers at the Bureaucracy to which it always appeals in
times of difficulty — is there one serious thinker to
contend that capitalist production is in tune with the
genius of our race, one serious thinker to deny that it
is repugnant to human nature ? An unbiased reading
of our industrial history reveals the tragic story of a
people acutely conscious of poison in the body politic,
and feverishly seeking the antitoxin. In vain ! No
anodyne has eased the pain ; victory, whether in battle
or in the factory, has brought no surcease from misery.
Here, indeed, is matter for a Greek tragedy. The false
gods, haughty in their seeming omnipotence, relegate
the thinkers and teachers to the kitchen to live on the
scraps left by courtiers and courtesans. From the
Heavens it is suddenly proclaimed that the day of the
tyrants draws to its end. Frantic with fear, the false
gods rush hither and thither appealing to the wise men
to confound the new spirit that would compass the
destruction of the doomed order. The seats of learning
are scoured for men of weight to come to the dread
tribunal to reassure the judges sent from on high.
Starved wisdom is ominously silent. Only hoary tradition
steps out of the gathering gloom, mumbling the ancient
litany to a chorus of homunculi strangely garbed in wigs
and gowns. All to no purpose. It is ordained that the
oppressors, having by devilish arts dragged apart the
workers from the fruits of their labour, and can in
nowise redeem their unnatural crimes, must in their
shame betake themselves to the Nether Regions.

A judgment of Westbury's was wittily epitomised
as " Hell dismissed with costs " ; Capitalism, too, is
condemned with costs, the monstrous debt due to a
community whose labour has been prostituted to selfish
ends and reduced to the exchange-value of dead things.

FINALLY, I BELIEVfi 359

We need not compute the indemnity ; it can never be
paid. Better to look to the approaching new order for
the recompense of a new life, instinct with new ideas,
finer purposes, and other methods. If, in the preceding
chapters with all the tedious dialectic from which there
is no escape, I have seemed to argue on low grounds
and in a minor key, it is not because I do not in my
heart and conscience believe that the conception of the
new life adumbrated in National Guilds calls for high
endeavour and worthy sacrifice. The image is locked in
our hearts, whilst the politicians and social reformers —

Dotards a-dozing at the very nonce.
After a life spent training for the sight !

— pursue their futile course of compromise and make-
shifts. I blame myself more than others if I have
been too reticent in boldly declaring my belief that wage-
abolition, with its logical sequel of an infinitely more
humane structure of society, marks a great epoch in the
history of Western Civilisation.

APPENDIX

ON THE REORGANISATION OF
UNIVERSITY EDUCATION 1

By M. W. ROBIESON, M.A.

Late Lecturer on Moral Philosophy at Belfast University

The existing relations of the Universities to the State
on the one hand and to other educational organisations
on the other are neither uniform nor well defined.
Since they have come into existence at different periods
over a range of seven hundred years, the conceptions
of public education which they have been intended to
fulfil have diverged even more than their internal struc-
tures. Oxford and Cambridge and Trinity College,
Dublin, stand apart by themselves ; the University of
Glasgow, founded by a Bull of Pope Nicholas the Fifth,
still bears some traces of its mediaeval origin ; for an
explanation of the peculiarities of the newer Irish Uni-
versities, reference must be made to certain stormy
religious controversies which are, at least, not new ;
while most of the modern English Universities betray
their later birth in being overweighted with technology.
In a city the sociological student can show that the
successive stages of its history are in some sense still
present. In the same way, the constitution of a Univer-
sity is a complex built up out of adaptations to varying
needs, compact, no doubt, of forces which in some

' Because of his tragic and untimely death, it was not possible for Mr. Robieson to read
and correct the proofs of this original and valuable contribution to University problems.
The task was kindly undertaken by his friend and literary executor, Mr. W. Anderson,
M.A., of Glasgow University.

363

364 NATIONAL GUILDS AND THE STATE

fashion work together, but which have never been seen
as a whole and seldom considered together in the light
of a comprehensive conception of education, much less
of the life of the community as a plastic whole. The
measure in which this is true of a single University
gives us some clue to the extent to which it holds of
the system of higher education.

Some attempt to discuss the place of the Universities
in a reconstructed educational system is increasingly
necessary. About details there will be endless variety
of opinion only partly to be unified by discussion. But
by the same process we may hope to reach some sort of
agreement on principles. I shall begin by stating those
which seem most fundamental.

I. No good reason seems to exist for a separation
between higher non-technical education and secondary
education different from that between primary and
secondary. On purely educational grounds no separate
authority is necessary, though convenience of administra-
tion may make it advisable. The educational process is
a whole ; as a single social function it should be in
charge of an authority which is also single.

II. Education being a definite specialised function
in the life of the community, responsibility for it should
be entrusted to those whose profession it is ; in other
words, to an educational guild, which should include
all those regularly engaged in imparting " civic " educa-
tion, and should possess a monopoly.

III. The State, the organised association which
expresses the spirit of the community, is immediately
concerned in education, because through it is developed
the civic spirit which it should embody. Hence it is
entitled to permanent direct representation on the
Educational Guild. The general lines of educational
policy must be laid down by the State alone and
embodied in legislation and the Guild Charter, which
is the warrant entrusting the Guild with responsibility
for the functions it enumerates, subject to the fulfilment

APPENDIX 365

of the conditions it lays down. As regards particular
questions, the State may have a voice through its repre-
sentatives on the various governing bodies of the Guild.

IV. The Universities, being the institutions which
provide facilities for higher non-technical education,
must be parts or organs of the Guild, and subject to
its control.

V. The most important line of divergence between
types of education is that which divides general or
humanistic or civic education, which develops the
capacities of the souls of men and fits them to be citizens
of no mean city, from technical education which equips
them for a trade. That for all men both are necessary
is obvious, and need not be argued further. But that
they cannot both be adequately cared for by the same
authority seems no less clear. I assume, therefore, that
technical education will be an affair of the appropriate
industry, taking the place of apprenticeship in the ancient
craft. The business of the University, on the other
hand, is to train men : if professional training enters
into it at all, it must be in a secondary fashion. And I
propose to discuss later the adjustments demanded by
these ideas.

A University, then, may be expected to perform the
following functions :

{a) To be a centre for non-technical higher education
within its own area, accepting full responsibility for it,
subject to the general control of the State and of the
Educational Guild of which it is a part.

(i) To grant degrees, etc., as evidence of a certain
minimum level of attainment.

(c) To be a centre for research, obliged to give to
those capable of it full opportunities and facilities.

(d) To be a depository of knowledge at the call of
the community, especially on politics, administration,
and social life.

Assuming that these are the functions to be performed,
we may set down in outline the form of administration

366 NATIONAL GUILDS AND THE STATE

which seems most suitable to a University. It is not
possible to do this without making use of some political
principles, but what they are should be pretty obvious.

(i) Like any other guild or part thereof, a University
should enjoy a high degree of autonomy. Within the
limits of its charter, in fact, it should have perfect freedom.
In this respect it would resemble a chartered body to-day.
But it would be on a considerably greater scale ; its
charter would be subject to periodical revision by Parlia-
ment ; and it would be exclusive, as having a monopoly.

(2) As at present, it should control the conditions
of entrance into itself, both for students and for its
members. This privilege may be expected to become of
less importance as the balance of forces in society alters,
accompanied with the disappearance of the non-educa-
tional forces which at present constantly tend to lower
the various entrance standards to professions.

(3) The vital concern of the State with education
makes it a civil, not an industrial, guild, and repre-
sentation on the governing bodies of Universities of
the central and local authorities follows as a matter of
course.

(4) The adjustment of the relations of the educational
guild and of the University to other guilds may be
brought about by interchange of representatives on
governing bodies, together with an extension of the
system of advisory committees. A good enough existing
example of the former of these principles may be found
in the relation of the Universities to the General Medical
Council. Though the latter body has no legal represen-
tatives on a University, it controls in practice the work
of the Faculty of Medicine. No one feels this type of
inter-control to be a burden ; because it rests on mutual
discussion.

Most of the following argument will be concerned
with the provincial Universities, as it seems plain that
a reorganisation of University education must take these
as its basis. To do this is not to overlook the unique

APPENDIX 367

position occupied by Oxford and Cambridge and Trinity
College, Dublin, or the value of a great deal in their
tradition. What their place ought to be I shall discuss
at a later stage. Some explanation of the organisation
of the provincial Universities is required before con-
sidering in what respects it is defective, in view of the
general principles we have laid down, and along what
lines it may be corrected.

Like practically all public institutions in Britain, the
constitutions of provincial Universities are based on the
principle of a fundamental and deep-seated distinction
of function and status between the professional staff
and the governing body. Though this division holds
in all cases, it is hardly possible to adopt short titles for
the two, owing to the variations in their designations.
Some divergence is also to be found in respect of their
legal powers.^ The rule, however, obtains that in the
governing body resides the personality of the Univer-
sity, for and on behalf of which it acts ; while to the
body of professors are allocated all matters which may
be regarded as purely " academic " — the adjustment
of courses, the maintenance of college discipline, the
guidance of research, the supervision of the actual work
of teaching, the appointment of assistants and demon-
strators, and so on. Financial questions are almost
entirely reserved to the governing body, which possesses
also very large powers with regard to those things which
are mainly in charge of the professional body. Courses,

' The Scots Universities, though they still remain legally autonomous corporations,
have graduallylost the free organisation of their earlier history. The University Court
is the governing body ; its powers are practically unlimited, and the Senate (the body
of Professors) can appoint only four of its members. The constitution of the provincial
English universities places ultimate power in the hands of the Court of Governors, an
enormous amorphous body, a place on which can usually be secured by a sufficiently large
fee : the Executive Body is the Council, the powers of which are very comprehensive
and the academic representation on it small. The Senate (the principal academic body)
has a good deal of administrative power, but its acts arc subject to review. In the
Universities created by the Irish Universities Act of 1909, a system, in principle the
same as that holding in Scotland, obtains, with two differences in the direction of freedom :
(i) The Senate (the governing body) has no explicit power of review, and probably cannot
interfere in certain matters ; (2) the nj^mbers of the non-professorial staff have a much
higher status than in Spo(lai)d,

368 NATIONAL GUILDS AND THE STATE

for example, generally require to be approved by it,
after the academic authorities have drawn up and passed
them. In most Universities, in fact, nothing whatever
that the professional bodies do is not subject to revision
by the governing body. Occasionally, matters of dis-
cipline are entirely reserved to the former ; but experience
shows that the peculiar legal powers of the governing
bodies render it difficult to safeguard even this right.
The significance of this is the persistence of the difficulty
which has always been felt in separating off purely
academic questions from matters of general University
policy. As will appear, I should propose to deal with
it by throwing the whole burden on the academic body,
inferring from it, in fact, that no such separation can
really be made.

Of the subordinate bodies in University administra-
tion it seems hardly necessary to say anything. The
Faculties are in the main committees of the academic
body, though certain members of the staff below the
grade of professor may have a statutory right to belong
to them. In some Universities, again, the whole ques-
tion of courses is separated from other academic subjects
and handed over to another professional body whose
relations with the governing body are immediate. But
these are matters of detail. Similarly as regards office
arrangements, sometimes of great importance, where
there is great variation of practice. The vital principle is
that the direction of the University is everywhere in the
hands of a body which is predominantly non-academic.

That such an arrangement will seem normal to most
people is only to be expected. The analogy of industry
supports it. The practice of other educational authorities
follows very similar lines. Associations commonly
supposed to be very democratic, like consumers' co-
operative stores, exhibit the principle in an exaggerated
form. If we pass over the cheap reasoning of the
business man who sees merely a parallel to his'^own
position as regards his employees, and try to understand

APPENDIX 369

what is the real case which can be made out for it, we find
that it comes to something like this. A University, it
is argued, is a public institution, supported largely out
of public money. Very varied interests are involved
in its working. It touches local life at a number of
points, and these should all be represented on it,^ so
that it may be controlled in the interests of the com-
munity, which must direct what is to be taught, guide
the allocation of the funds to the different departments,
and look after the adjustment of the competing claims
which are inseparable from a complex institution. After
all, the primary function of a University is to instruct
students, who — or their parents — are entitle to say
what they desire to have taught in it. The business
of specialised staffs is to teach, to do research, to supply
detailed information, and to guide the higher powers.
Within their own field, nobody interferes with them.
The governing body leaves them alone, provided that
they do their work, reserving, of course, to itself the
power of hearing appeals and acting in the light of the
evidence from any party which considers itself aggrieved.
Men of common sense, in fact, must control the expert,
who is a notorious fool outside his own borders. Public
control of a public institution is the watchword. And
support for this view is found in the fact that the
Government has never gone so far in the direction of
determining what is to be taught in Universities, as it
has in the case of more elementary education. That
has been left to the wisdom of the governing bodies on
the spot, to determine it in relation to local conditions.
They are representatives of the central government, and
the basis of their power is the same in principle.

^ In conformity with these principles, on the governing body of a provincial Univer-
sity may be found representatives of the body of graduates. These frequently form a
compact, powerful, and reactionary body. Representatives of the City Council : of the
academic body (who are always a minority) : sometimes of the students ; and a certain
number, appointed in various ways, who are somehow or other identified with education
or public administration. To these, of course, must be added the official heads of the
University. The resulting body varies greatly in size, from the thirteen members of
the University Court in Scotland to the swollen Councils of the Welsh Colleges.

2 B

370 NATIONAL GUILDS AND THE STATE

Though this system is not so bad as the immediate
direction of a Government department, as used partly
to be the case in Ireland, it is, nevertheless, highly
unsatisfactory. A divided responsibility brings with it
a constant possibility of conflicting interests, and is
followed by an equally constant necessity for concili-
ating non- academic views or postponing indefinitely
much-needed reforms. I ought to say as explicitly as
possible that the personal factor enters hardly at all into
this question, as it does familiarly into that of a local
elementary education authority, where the members are
frequently openly antagonistic to the whole cause of
education, and petty personal likes and dislikes determine
their policy. In a University, on the other hand, you
are dealing with educated men on both sides : non-
academic members of governing bodies are often men
of great attainments and experience and genuine en-
thusiasm for higher education : while party or merely
personal questions are usually marked by their absence.
The constant friction which is a familiar feature of
provincial college life cannot be got rid of or even much
mitigated by any revision of the system of election,
because it is not due merely to the wrong men being
there. At the bottom it depends on an antagonism
between two principles or dominant ideas, each repre-
sented by a group. Both are real and both are vital.
A satisfactory educational system requires their adjust-
ment, as does also the social life of which they are
a part. The failure of existing arrangements is an
elementary consequence of trying to make one do the
work of the other — an attempt which (so far as it has
clear grounds) arises from a mistaken social theory. To
correct it is not merely to set free the energies of pro-
fessional people to do that work which is peculiarly their
own ; it is also to excuse various worthy people from
the unpleasant task of deciding questions for the solution
of which they are not really qualified.

Since the central idea underlying National Guilds

APPENDIX 371

may be taken to be the extension to industry and other
social functions of the notion of a chartered corporation
which (for reasons which any historian could explain)
is present in a modified form in public institutions like
Universities ; and since from another aspect it may
be regarded as the introduction into industry of the
type of status and responsibilities which at present partly
belong to professional bodies, which are to that extent
free from the wage-system, the general line of argument
by which the monopoly of labour-power which is the
Guild and the partnership of the Guilds and the State is
defended may be expected to involve our present con-
clusion. For our purposes, however, a different line
of approach will be much more effective. We may
proceed by trying to discover what function the non-
professional governing bodies of Universities now
perform which could not equally well be entrusted
wholly to their professional colleagues. It may be
observed that this is not really a separate line of argu-
ment. It should turn out to yield in respect of a
department of education the same principles which (it
is asserted) hold as regards our economic system as
a whole.

In the first place, it may be argued, non-academic
bodies decide general questions of University policy
on grounds of common sense. The assumption here is
plainly that there are certain questions of general policy
which can be separated off from academic ones. To
this I reply that they are extraordinarily hard to detect.
In fact, I do not believe they can be shown to exist
apart from (a) genuinely academic questions — like the
curriculum for a degree, — and (b") large questions of
educational policy, in which the interests of the rest of
the teaching authority and of the community are involved.
The non-academic governing bodies can hardly claim
specially to be entitled to decide the first. And in
claiming to represent the second they have shifted their
ground, and adopted the second line of defence. The

372 NATIONAL GUILDS AND THE STATE

first line as a whole, however, suggests, if it does not
contain, a peculiarly vicious fallacy, the evil effects of
which are more obviously implied in education before the
University stage. It is that the work of the teacher is
purely routine and largely mechanical. This deplorable
idea follows inevitably from a system which boasts that
the real responsibility for education is entrusted under
it to laymen, in the belief that teachers cannot be allowed
to take genuine decisions. The business man, sitting
on the local education authority, who engages a teacher
thinks of him as he would of a clerk (not a confidential
clerk) and pays him accordingly the wages of a scavenger.
That this whole conception of education is tragically
wrong most of us recognise, if we are decent men. But
it is at least as certain that the principle upon which the
organisation of our education proceeds implies it at every
point and is the greatest obstacle to the appreciation of
educational ideas and their translation into practice.

The function of the governing bodies, it may be
contended in the second place, is to represent the public
interests on the Universities. This argument is often
confused with the first. If we distinguish them, it
appears to be that the community is vitally interested in
the efficiency of Universities and in their relation to
educational policy as a whole. This contention is em-
phatically true, and it is provided for in Guild theory by
the representation of the State on the central educational
authority and on such local bodies and institutions as
seems necessary. But this is a very different thing from
the practically complete government of Universities by
representatives who may be supposed to be acting in
the public interests. The common interest in higher
education seems, when we analyse it, to have two elements.
The State must be satisfied that the provisions of the
charter are observed, which implies that a reasonable
degree of efficiency is attained. Secondly, ordinary
University and educational administration must bring
the Educational Guild into direct touch with other guilds.

APPENDIX 373

especially the Civil Guilds. Naturally, the State repre-
sentatives will act as liaison officers. But — and this
observation is fundamental — neither by the Education
Guild nor by the Civil Guilds nor by these two jointly
can wide questions of public policy be settled, but only
by Parliament and the State.

The questions now left are really technical questions ;
and the real and permanent function which non-academic
bodies perform proves on examination to be a rapidly
vanishing quantity.

The third line of defence is familiar, and is not without
foundation. With respect to Universities it is that the
non-academic members of governing bodies represent
the local interests. The constitutions of most of the
modern English Universities can be explained only by
supposing that this assumption is valid ; no other reason
can be given for the fact that the ultimate authority
nominally rests in a huge Court of Governors while the
executive power belongs to a Council. We require, in
any case, to ask why the local interests should be repre-
sented, and whether the just representation of them
involves the possession of the powers which those, whose
defence it is that they stand for them, actually have.
Two elements are included, and both of them are of
some importance. In the first place, some members
are appointed to represent local institutions like hospitals,
whose relation to Universities is very close. It is an
example of the principle of interchange of members to
which we have already referred, and no remark need be
made on it except that, since its purpose is not control
but co-ordination, one member is enough. The relation
of the local University to the local administrative bodies
is covered by this principle. But, secondly, the adaptation
of the activities of the University to local needs is an
argument we have heard even more frequently. Under
present conditions it is apt to result chiefly in attempts
to make the University do the work of a technical college ;
and in itself I should argue that it is either a myth, or

374 NATIONAL GUILDS AND THE STATE

can be met by the institution of an advisory committee.
The principle upon which my whole argument proceeds
is that the producer, the craftsman, the professional
expert, must possess in his own hands the control over
the conditions particular and general of his work ; and
this application of it seems essential, and is, besides,
justified on its merits. But an advisory committee may
have a definite part to play if its function be clearly defined,
and it is not merely expected to talk at large. Then there
is a reason for its existence, which may occasionally be
sufficient. Even under existing conditions, an advisory
committee brings the University into touch with certain
sections of public opinion. In an Educational Guild,
ordinary provision would naturally be made within the
guild itself. But for some matters the principle might
still be found useful. To advise on public feeling and
the common attitude ; to express general views and
bring to light unsuspected needs — these are the functions
of such a body. About, for example, a particular public
examination, there will always be suspicions, which rest
on surmise. With the ready provision of information
the suspicion will die a natural death, even if the surmise
gets the length of expression. Incidentally, such a
committee may disseminate among its own constituents
an account of the considered attitude of the University.
Most of the existing authorities of our Universities
could do good work in charge of advisory committees.
Only our extraordinary prejudice in favour of local
control keeps them where they are.

A fourth set of arguments is quite commonly used.
A body of men who are not experts, it is said, are required
to settle disputed questions on which there is disagreement
in the academic bodies ; having all the facts before them,
they decide without bias. This argument appears to
me quite aggressively false, and I shall try to show why.
(i) It rests on a common error about the settlement of
disputes. No doubt, in any such organisation there
must be a body which is sovereign in the legal sense.

APPENDIX 375

Being the final body to be consulted, its decision is final ;
but why it should consist of non-academic people simply
does not appear. (2) The dangerous suggestion is
conveyed that the disputed questions which require to
be settled by the non-academic body can be judged by
reference to a set of common-sense principles, or a code
of law. It is not easy, at least, for an academic person,
to discover where these mysterious principles exist. We
occasionally meet people who pretend to have access to
them. Possibly, like the English Common Law, they
have their being in gremio legis, and are produced from
this hiding-place when required. We know, however,
that nine times out of ten the questions which go up on
appeal are purely academic, and are, as a matter of fact,
settled on a more or less imperfect apprehension of
technical grounds. And in the case of the one-tenth
that remain, by what marking on the door-posts is it
supposed that the dispenser of common sense passed
over the birthplaces of those who were afterwards to
become University teachers }

On the negative side of this argument I desire
to say very little. If it be true that no precise and
definite function can be discovered which belongs to the
non-academic governing body of a University, we may
expect decisions are frequently taken on wrong grounds.
Though this varies a great deal from one college to another,
no one who knows provincial Universities will deny its
prevalence. Sometimes, no doubt, religious difference
or political prejudice is allowed to enter ; but, happily,
the day for that sort of thing seems to be over. The
application of forgotten obsolete standards to present
conditions is a much more present evil ; and in view
of the fact that unless a man be every day in his own
craft he can hardly hope to escape from the insidious
conviction that when he knew it it was at its best, this
is not surprising. The irritation of one who knows
with the outsider, however acute, who just fails to grasp
a technical divergence and the relief of discussing it

376 NATIONAL GUILDS AND THE STATE

with a colleague, no matter how opposite in his out-
look, we all know. And the constant temptation to
unscrupulous or fanatical professors to appeal to the
prejudices of non-academic bodies in order to win a
victory over their colleagues, is a sufficient condemnation
of the system.

The points which remain for consideration are
hardly matters of principle, but something should be
said about them to avoid misunderstanding. At an
early stage of our argument we laid down the principle
that civic should be separated from technical education,
and the latter handed over to the industrial guilds
concerned. " With your reasons for this," it may be
said, " we entirely agree, and we admit that its application
to primary and secondary education is simple. Even
in the latter case some preparation for future divergence
can be made by arrangements about optional subjects.
In the case of higher education, on the other hand, the
principle, we think, either breaks down, or is incapable
of application without enormous modification. We find
evidence for this view in the history of the development
of Universities both in America and in England. The
technological side has been enormously emphasised in
the newer colleges, and by now the two things seem to
be inextricably mingled. On the other hand, if we
really mean that professional and technical training is
to be under the direction of the appropriate guild, then
from the Universities must be taken away to special
colleges or technical schools the Faculties of Divinity,
Medicine, and Law, and the Schools of Engineering,
Education, Agriculture, Naval Architecture, and so on.
In the University will be left the Faculty of Arts as its
mainstay and prop, together with Pure Science. Only
in this way can you avoid the conflict of interests in one
body, to which you have rightly referred, between the
care for the development of the soul and the provision
that technical skill is not wanting."

That this argument is relevant, and attractive by

APPENDIX 377

reason of its simplicity, it would be impossible to deny.
It is one of those arguments, however, which seem more
important in the abstract than they prove to be in the
concrete. The body of education is, no doubt, one,
with many members ; and some divisions of it may be
fatal, while others mutilate it. Still, it has its natural
articulations. Against the argument, and in favour of
a development of the Universities which does less violence
to their traditional functions and curricula, certain con-
siderations may be adduced.

1. An indication of a sound instinct underlying the
present arrangements may be found in the fact that the
professions for which relatively technical training is at
present provided in the Universities are for the most
part those which would become civil guilds — e.g.
Education, Medicine, Law. These are all public or
civil as opposed to industrial services ; more or less
directly, they are concerned with public life, and, as
professions, they are, in the interests of liberty, organised
in guilds. The provision for those proposing to enter
such occupation of a course which not merely develops
technical skill but induces a wide outlook and permits
some appreciation of the unity of knowledge, which
should make men philosophers and teach them to be
free, is the immediate service of the community. The
real division which at present exists in colleges is not
between arts and all other students, but between pro-
fessional and technical.

2. Even though the logical application of a principle
demanded it, and the convenience of administration
were considerably strained by failure to carry it out,
the existing arrangement might still be defended on
grounds of the resulting social life. To exclude the
Faculty of Medicine, for example, would be to strike a
blow at a side of University life which ought rather to
be encouraged. In the transitory formative period of
professional life that men should mix as much as possible
with those going in for other professions, seems an

378 NATIONAL GUILDS AND THE STATE

incalculable good ; and the mere fact that this sort of
association has flourished so exceedingly in the past
indicates that these faculties are not really purely technical
schools. To set up technical schools is for many reasons
necessary ; but that they have a narrowing effect cannot
be denied. A great part of the tragedy of the teaching
profession is, undoubtedly, due to the fact that it has
almost always been trained in isolation.

3. The root evil which gives rise to the principle of
the separation of civic and technical education is that
the two lines diverge, and that one authority, it seems,
cannot consult and promote both. Within Universities,
even on the existing organisation, the difficulty is not
very acute, knd with the absence of a non-academic
governing body, with its confusion of ideas with prin-
ciples and prejudices with both, it would disappear
altogether. Each Faculty would (as it does now) act
as a Board of Studies in its own department ; no doubt,
all would come up for revision before a central Board.
But — apart from cases due to mere lack of corporate
sense — criticism of the curricula of one Faculty by another
is confined to problems where joint interests are in
question.

4. To extend and develop the existing system in
relation to other guilds would be simple enough.
Any guild, such as the Medical Guild, would lay
down the conditions of entrance to itself (subject, of
course, to the general approval of the State). The
training given in the Faculties of Medicine in the
Universities would naturally reach at least this minimum
standard ; for if it did not, nobody intending to enter
the profession would take it. The Faculty of Medicine
would be in the Educational Guild, or under its control ;
it would represent an adaptation on the part of that guild
to a need not perfectly satisfied by purely professional
colleges. And this, in fact, seems to indicate a very
general principle. No school or faculty should be
instituted by a University, except to meet the demand

APPENDIX 379

for a type of training so clearly bound up with general
civic education that it cannot be fully satisfied by a purely
technical course.

We may assume that a division of this kind will
correspond to some extent to that between training
which, though it may involve much laboratory work
and some " workshop experience," is so predominantly
theoretical that the practical man (who since he presents
a distinct type of mind may be expected to persist in
any social organisation) will despise it, and training which,
judged by his standards, is sound. In most Universities,
the difference is perhaps clear enough. It holds, for
example, in medicine, always a rather difficult case. There
should be a real difference between the training which is
given in a course leading to a University degree in medi-
cine and that provided by a College of Surgeons. We
may perhaps express it by saying that, in the former,
students are given an education, the main subject of
study being the nature of the human organism in health
and disease. From the laws of these processes con-
clusions are drawn as to methods of cure, and the
whole is illustrated by numerous practical examples
and demonstrations. In the latter, on the other hand,
instruction in the art of healing is the first object, and
discussion of principles is secondary. Practical skill
and not knowledge is the primary aim. And the partisan
of the former method may be expected to contend that
as the range of medical knowledge continues to expand,
a grasp of principles becomes more and not less necessary
to the beginner, forming a basis on which experience
can build. But no one who knows would pretend that
existing University practice is not tending in the direction
of making the Faculty of Medicine a purely professional
school. This is, no doubt, the natural result of the
immense growth of medical science ; but it does not
seem to laymen to be the only method of dealing with
the situation, and is in any case incapable of being carried
to its logical conclusion without disaster.

38o NATIONAL GUILDS AND THE STATE

The Faculty of Law Is an interesting and simple
case. A Law degree must be preceded by an Arts one,
and is itself purely theoretical. With the practical
training necessary for a lawyer the University has
nothing whatever to do. (For that matter it has very little
in the case of medicine either ; but it requires evidence
from other bodies of such training.) To the inclusion in
a University of a Faculty of Divinity the objection that
men's views on theology differ so enormously and vitally
seems fatal. But the transference to the Faculty of
Arts of many subjects at present commonly included in
that faculty is desirable. Hebrew and Canon Law and
Church History are subjects of general culture ; and
they are not more controversial than, say, Philosophy.

I do not wish to undertake a lengthy discussion of
the place (If any) of a Faculty of Commerce. The
subject is so disputed that remarks on it would probably
comprise more qualification than content. But as a
writer who regards the economic structure of society
as fundamental can hardly pass it by altogether, I shall
content myself with stating a conclusion. In the light
of some experience, I am inclined to regard it as, on the
whole, desirable. Even under existing circumstances,
where attempts to make it work have suffered to an
unusual extent from the prejudice of governing bodies
against theory, the distinction between a Faculty of
Commerce and a business college, or even a " Handels-
hochschule," is pretty obvious, while In a society
organised on guild lines Its function would be much
clearer. The theoretical problems of industrial and
commercial organisation, of finance and international
trade, of the adjustment of supply and demand would
require much examination ; and guild administrators
who would be called to deal with them in the concrete
could scarcely fail to require theoretical guidance. On
the other hand, nothing could be more fatal than the
prevailing idea that a Faculty of Commerce should
specially attend to the economic and commercial problems

APPENDIX 381

of the industry of its locality. If, indeed, it concerned
itself with everything but this, it would be fulfilling its
own purpose better.

For one of the existing types of college nothing is to
be hoped except its speedy extinction. The Training
Colleges which now dot the land must come under the
Universities and be post-graduate schools. A decent
society can hardly permit a profession on which is to
be thrown the whole responsibility of education to be
the worst paid, the least honoured, and by far the most
inadequately trained of them all. And yet, I admit
that the two years' course in a local Training College is
quite enough for the servant of a local authority engaged
for the performance of routine work, which, we know,
is all that our teachers of to-day are entitled to be.
When they happen to be more, it is not in the bond.

Something, however, should finally be said about
federal arrangements. The central idea which we have
taken as guide in this discussion is that of autonomy.
Various writers on educational reform, the views of
some of whom are entitled to respect, have almost gone
so far as to suggest that our future Universities will
consist of numerous federated colleges of various kinds.
" Each University should recognise, and utilise by
affiliation, the work done within its area by Technical
Colleges and Collegiate Institutions (Colleges of Art, of
Agriculture, for the Training of Teachers, etc.), in so
far as it is on a University level. This would not only
bring about niuch closer co-operation, but would greatly
extend University teaching, and save wasteful duplication
of staff and equipment. . . . To assist in the work of
co-ordination, a Committee, say the National Advisory
Committee, should regulate and control the relations
between these affiliated centres and the University itself.
. . . There should be representation of such affiliated
colleges in all the University Courts." ^

1 Reform in Scottish Education ; being the Report of the Scottish Education Reform
Committee of the Educational Institute of Scotland, p. 117.

382 NATIONAL GUILDS AND THE STATE

No one with any experience of University administra-
tion has much taste for federal Universities or affiliation
arrangements of the ordinary kind ; and this suggestion
seems to contemplate an almost indefinite extension of it.
Under a properly organised educational system, such
as that which I am trying to outline, the most prominent
causes of some of these difficulties would disappear.
No question would arise with reference to their most
fruitful source, the affiliation of Universities and Tech-
nical Colleges. More generally, indeed, it would be
recognised that the prevailing attempts to bring pro-
fessional and technical institutions into immediate relation
to the Universities not only presents acute administra-
tive problems, but imply a wrong principle. On the
other hand, other types of federal organisation exist,
for which more, perhaps, can be said. Some of them,
it is true, are due mainly to the necessity for devising
some working arrangement between institutions which
had been brought into existence by a series of policies
all equally short-sighted. Another class, again, the
mark of which is to maintain a University for the purpose
of uniting a number of colleges, may be expected to
disappear with some public realisation of the magnitude
of a just provision for University education.

A close interrelation of colleges of the same type,
it need hardly be pointed out, is an essential conclusion
from our whole argument. That is, however, almost
utterly diffisrent from anything we know at present.
For an analogy we should turn to the relations of
Faculties within a single University. All the Universities
of the kingdom will belong to a single organisation,
and among other incidental benefits we may expect
a much -needed adjustment of degree standards to
one another, together with a common matriculation
examination.

There are two existing branches of University work
to which I have not referred. I mention them lest it
should be assumed that they must vanish in the general

APPENDIX 383

collapse of the old order. The first is the position of a
body like the University of London, which grants all
its degrees by examination without evidence of residence
or attendance at an affiliated college. Though it is
clear that such regulations are calculated primarily to
meet the cases of people whose present desire for a
degree exists because of the extraordinary imperfection
of our educational system, no particular reason seems to
exist for doing away altogether with this distinctive
feature. But the more important function of being the
residential University for the London area should be
separated from it ; though in the case of the latter,
owing to its peculiar history and organisation, the
difficulty in respect of the mixture of pure and technical
education is perhaps at its maximum.

The other is that adult University known as the
Workers' Educational Association. As a permanent
means of making that knowledge of liberal studies, for
the dissemination of which the University should be a
centre, available directly for people who may never have
been students beyond the primary school stage, it leaves
little to be desired. It would be a mistake to assume
that even with a great improvement in the relative attain-
ments of the whole citizen body, the need to which it
ministers to-day would wholly pass away. Some desire
on the part of members of industrial guilds for theoretical
instruction in subjects of vast public importance will
always remain, and may, indeed, be expected to increase.
The University Extension system cannot face it ; but
the democratic highly adaptable constitution of the
W.E.A. may serve as a model to which a greater thing
than itself may be constructed.

Of all the services which make up the economic life
of the community, that of education is almost the most
susceptible of guild organisation as an immediate measure.
A discussion of transition is, therefore, hardly necessary.
The problems which would most of all press for solution
arise rather from the reactions of great educational changes

384 NATIONAL GUILDS AND THE STATE

on other services and on industrial life. No matter how
inexpensive and easy you make elementary and secondary
education, in a society like ours, to say that it gives an
equal chance to various sections of the community is
flagrantly absurd. A really comprehensive scheme of
scholarships on a national basis with the object of ensuring
that no child shall be prevented by the poverty of its
parents or the obscurantism of local educational authorities
from access to educational facilities up to the University
stage, is an unquestionable necessity for very many
years at least. At the later stages, these should be on
a generous scale. We may as well accustom men early
to a proper standard of life ; they will be the less likely
thereafter to submit to exploitation. Most of us, no
doubt, have met men who had taken harm from having
too much money. We have all seen infinitely more
harm come from too little. For the former there is
always the remedy of moral reformation of which we
have also heard a great deal, generally with reference to
the wrong people.

This discussion has naturally been concerned mainly
with administrative problems. Certain wide educational
principles are, I hope, evidently implied. Positively
they regard education as the training of the capacities
of the soul, and freedom as its core. And negatively
they altogether decline to admit that anything worth
having can be imposed from above. In American
Universities, the compelling idea of organisation was
more and more tending to reduce higher education to
an enormous loose collection of specialisms, A great
tradition has preserved our Universities from this blight,
though its insidious beginnings could be traced. The
demand for technical in place of civic education was one
of them ; the growing neglect of the Faculty of Arts
was another. No final cure can be discovered without
a new birth of ideas, and a still newer belief in them.
The problem of organisation is, however, not irrelevant.
An educational system — even a system of administration

APPENDIX 385

— ^is not mere machinery which can be turned equally
to the service of every end opinion may happen to suggest.
The principle of local external control, which dominates
the present system, is responsible for more than half of
our educational deficiencies. It substitutes prejudices
for principles ; it introduces into education the profit-
making standard ; it keeps the teachers of all grades in
their places, and by confining them to a mechanical
routine deprives them of initiative, and induces them
to rule children by fear instead of consent. But it reflects
the economic structure. The deadly trail of the industrial
system is over it all.

Before dealing with the constructive side of the
problem, I ought to say something about finance. This
is, of course, the great stand-by of the collectivist ; and
responsibility for the superstition of democratic control
seems to rest with it more than with any other factor.
Two sets of arguments are used — the ethical and the
political. The first is capable of very brief treatment.
When the public pays the piper, it is said, the public
has a right to call the tune ; and it is usually added that
this must be a democratic one. To this the short answer
may be returned, that the public does not provide the
funds. The idea that it does is due to an administrative
arrangement which is finally unimportant, but which
deceives your democrat. I pass over for the moment
the explanation of this arrangement, and state the truth
which underlies the objection. If the State is the final
possessor of the " material " of education, it is in the
position of trustee for the community, and is entitled
directly to watch over and represent the common
interests. And this I at once admit.

The administrative arguments are a little different.
The existing system seems to be partly due to a more
or less clearly thought-out conviction that, even if there
were no other arguments for it, the presence of business
men on the governing body of a University is essential
to manage its finance. The implied suggestion that

2C

386 NATIONAL GUILDS AND THE STATE

academic people have no business ability may be passed
over with Dr. Johnson's remark — " Ignorance, madam,
pure ignorance ! " The argument itself simply fails
to observe that the methods required for the financial
direction of a modern business, even on a large scale,
are utterly different from those demanded in the conduct
of the affairs of a public institution. One aims at
making a profit, and by that test is to be judged. In
the case of the other, the notion that financial reward
should be exactly proportioned to service rendered would
be justly resented. These two, in fact, proceed on
opposite principles, and confusion regularly results from
trying to blend them.

Even if this be admitted, another argument may be
used. You cannot, it will be said, hand over an educa-
tional grant to a body of people who must not only
allocate salaries to themselves and to one another, but
determine the proportions in which it is to be devoted
to equipment on the one hand and salaries on the other.
With the best will in the world it is difficult to see much
of a problem here. A certain educational programme,
known in its outlines beforehand, demands an equipment
the cost of which can be determined within fairly narrow
limits. For certain classes of work, for certain schools,
and so on, expenses are pretty well standardised.
Representations for increase come up from a group to a
local and, if necessary, a central body, each of which has
a finance committee. Should the increase seem reason-
able, and funds do not permit of it, a larger expenditure
on education must be asked for in the ensuing year. In
principle the object is to substitute discussion for mere
competition in the determination of these things. No
reason can be given why in a guild organisation the rule
should be abrogated which forbids a man to sit on
a committee if and when it determines his own salary.
We are apt, perhaps, to forget to what an enormous extent
salaries are to-day determined otherwise than by com-
petition. They have, in the case, for example, of members

APPENDIX 387

of the staffs of universities, some relation to the cost of
living, and some to a man's status and responsibilities.
But we all know that quite other factors make such posts
attractive — a high degree of leisure, a social position of
a sort, freedom from the wage-system, and so on. In
a guild society, indeed, it is unUkely that the remuneration
of such posts would be much increased. The community,
after all, is still very poor.

I have assumed that the income of an Educational
Guild and therefore of a University should be derived
from State funds, and some comment on the point makes
a convenient transition from critical to constructive
discussion. From the point of view of finance, at least,
there is an obvious difference between a " civil " guild
like the postal service (really an intermediate type) or
education or the police and an industrial guild like the
transport service, and some analogy to it can be dis-
covered in the existing social system. Sometimes we
find this described as the difference between a producing
and non-producing guild. Such a terminology is very
bad, the fact being that education is productive in
exactly the same sense as mining, except that the wealth
produced is in the form of services, not goods. The
same fallacy is perhaps suggested by referring to the Civil
Guilds as spending departments, though for other reasons
this terminology is so convenient as to be almost indis-
pensable. Under a guild organisation, of course, our
vision would be no longer obscured by the fact that
one group of producers was apparently functioning in
the interests of the State and the other for private profit.
There is no a priori reason why a particular occupation
should belong to one group rather than the other. The
protection of life and property might conceivably be
left to private enterprise in a State which preserved a
jealous monopoly of the manufacture of snuff and
distributed it free to all good citizens. But for ordinary
purposes the real distinction is between those services
which are paid for directly and in relative proportion

388 NATIONAL GUILDS AND THE STATE

to the individual's consumption and those which are
communally supplied and paid for indirectly through
taxation. Beneath all these differences is the fact that
the life of the community rests on the regular production
of goods and services, and that by making them avail-
able for consumption and by this means alone can it
be carried on. The national income consists of goods
and services ; to it contribute equally miners, teachers,
textile workers, clergymen, actors, engineers, waiters,
and so on. " They also serve who only stand and wait."

The income of the Textile Guild, we may suppose,
will come more or less directly from its customers into
its hands ; and of it a certain proportion will be handed
over to the State as " rent " of the means of production,
v/hile the remainder forms the net income of the Guild,
available for additions to capital and the pay of its mem-
bers and other current charges. The difference between
this and the Education Guild — if we assume for a moment
that all education is free — will be that its income will
come to it through the State and will form an item in
the annual budget. It cannot be too clearly emphasised
that this does not mean that education is a civil charge
thrown on the productive capacity of the industrial
(productive) guilds collectively. The consumers — in
this case the parents — pay for it as really as they pay
for the books they buy or for their medical attendance ;
but payment is not accurately adjusted to consumption,
and is besides indirect.

We may in fact go further ; education need not
necessarily be a State charge. The advisability of
making it so requires to be established by special argu-
ments. In the case of other services such as police
protection, administrative difficulties would be decisive
even if there were no other arguments. But the reasons
for making education " free " are of a different sort and
are pretty generally admitted. On the whole, it seems
best that primary and secondary education should be
free, though few people would object to a special charge

APPENDIX 389

for special facilities. Technical education ought to
have separate discussion under the head of apprentice-
ship and entrance to a trade. In the case of Univer-
sity education a revision of the present system as regards
provincial colleges seems provisionally easiest — the
burden of the cost to be borne by the State, together
with reasonable fees to be paid by students. To enter
into a detailed discussion of the point would hardly be
relevant here. The inclusive fee system, it may be
said, is for many reasons clearly advisable. And for
making the class fees very light and examination fees cor-
respondingly heavy (following to some extent the practice
in France and Germany) there is much to be said.

The division of the public charge for University
education between the State and the local authority
(supposing the latter to exist, say, on a provincial basis)
can hardly be considered without raising a parallel
question in regard to primary and secondary education,
and I do not propose to discuss it here. No matter
of principle seems to be involved ; the idea that there
is arising partly from the tradition about local control
and partly from the assumption that different localities
require correspondently different types of University,
when all that is meant is that they require different types
of technical college.

About finance one further remark of very general
application may be made. The prejudice against the
management by a civil guild of its own finance is largely
due to the confused idea that it will be in a position to
determine the amount to be allocated to its own particular
service and to interfere with the revenue of others.
Nothing could be more absurd. Such questions must
be reserved for the consideration of Parliament to deter-
mine, in view of the needs of the services and the size
of the national income. We must, however, become
accustomed to think of the annual expense of University
education alone in terms of millions instead of the few
hundred thousands we now devote to it ; and we must

390 NATIONAL GUILDS AND THE STATE

keep in mind what this means — not that so much is
abstracted from production and devoted to a non-
productive service ; but that immensely more national
energy is directed to the enormously productive work
of education, both as regards those professionally en-
gaged in it and those who receive instruction. Certain
facilities, at least, must be multiplied many times over,
and equally a really adequate livelihood must be provided
for University staffs, both for those actually engaged in
teaching and those exclusively devoted to research.

So far our conclusion is this. The control of the
affairs of a University should be in the hands of its
staff, together with representatives from the State,
from the Educational Guild as a whole, and from other
allied guilds. Something ought now to be said about
the duties actually performed by the staff. In itself
the problem is simple enough, but it is obscured by
historical circumstances. The rule that a non-academic
body should govern is universal in provincial colleges ;
but the degree of autonomy which the staff possesses in
spite of this varies enormously. Into such questions
as whether the governing body should be the body of
professors as a whole or a selection from them made
for the purpose, to concentrate the burden of administra-
tion, it is unnecessary to enter. But on the organisation
of the college as a whole two observations seem essential.
The first is that a hierarchy is both unavoidable and
advisable. It promotes efficiency and it does not con-
flict with freedom. As a man learns his craft, his
responsibility should grow. The second is a corrective
to the over-emphasis of the first. Representation on
the administrative bodies should bear some relation
to responsibility. Arrangements like those which at
present exist in the Scots Universities and elsewhere
according to which even senior lecturers in charge of
departments have no representation on any responsible
governing body should be made rightly impossible. I
am aware that there are historical reasons for this scandal

APPENDIX 391

and that probably few can be found to defend it ; it is
an interesting example of failure to adapt structure to
altered function ; but its psychological effect is none
the less deadly. The cure is not to make all University
teachers alike, but to allot administrative power in
some proportion to responsibility. The future develop-
ment of the provincial Universities is undeniably going
to be in the direction of multiplying the number of
lectureships, not the number of chairs. Why should
not the title " professor " be reserved for the head of
a department, and all lecturers be made members of
their respective faculties, with representation as a class
on the governing body .'' In the same way it seems
essential that assistants and demonstrators should be
recognised from the beginning as members of the
University and be on departmental bodies, if such
exist. But these things, after all, are questions of detail.
" In these matters," as Plato said,^ " there is no need to
dictate to true men. They will easily find for themselves
most of the legislation required."

The machinery of administration is for the most
part there already, and very little need be said about
it. One of the most striking changes which would be
brought about by the reconstruction I have outlined
would be that the final decision of vital problems of
policy would lie finally with the academic body, and
the advantages of this leap to the eye. Most of these
questions are as a matter of fact highly technical ; and
if an advocate of a change cannot convince his colleagues
of it, to translate it into practice is to run a grave risk
of disaster. On the academic people must in any case
fall the burden of making it work ; and they will not
readily load themselves with foolishness. When, in
fact, one puts it in this way the absurdity of the present
system begins to appear. New ideas in education,
ideas which are of permanent value and not freaks,
become known first of all in the teaching profession,

1 Refublic, 425 c.

392 NATIONAL GUILDS AND THE STATE

Only the desire to prove something else by means of
this would induce any one to contend that they are
commonly introduced into educational institutions with
great difficulty, in the face of professional opposition,
by non-academic authorities which have received them
gladly. For we know, in short, that the adherents of
local control do not fear that in the hands of professors
the ideas and methods of the University will become
out of date. Rather their dread is lest traditions, social
and other, be disturbed in their quiet rest.

It need hardly be pointed out that the principle that
education must be a self-governing profession does not
involve as a corollary that the University should have
no governing body, nor does it imply any theory of
primitive democracy and the decision of all questions
by voting where it is possible. I have in mind no
Soviet, regarding representation as a middle-class pre-
judice which all good men will abandon in favour of
delegacy. In the matter of appointments, for example,
beyond doubt the qualifications of a candidate for a
vacant post can be estimated more surely by men of
the same occupation, for they at least are conscious of
all the weaknesses of their craft, which seems essential
if they are to estimate its strength. And, again, upon
themselves will fall the burden of a blunder, because
they will require to endure it from term to term. And
I do not wish to refer to the intense devotion to colleges
which continues to show itself among their staffs, in
spite of the most unfavourable circumstances.

Education, as we have seen, is a civil as distinct
from an industrial function. In the main it is a spending
department ; it belongs to administration as distinct
from industry. While, like other guilds, the Civil Guilds
are national in their scope and operations, certain special
problems arise in connection with them. The geographi-
cal distribution of an industry is relatively given, and
there are reasons for it, good or bad. To this the corre-
sponding guild must adapt itself, and in any case it is

APPENDIX 393

brought into contact with its customers through the
Distributive Guild. But the non-industrial services
directly touch every person in the community, and their
administrations must take into account at every point
the question of area.

The existing activities of local authorities are an
extraordinary medley, and badly require to be sorted
out. Many of them, milk supply or tramways, for
example, are industrial, and must simply be handed
over to the appropriate guild. There will remain a
number of others, of which education and public health
and general administration are the chief, which will
form guilds of their own, determining their own ad-
ministrative areas, which for obvious reasons should
practically correspond with each other and with those
of the Distributive Guild. The present areas for local
administration are hopelessly confused and imperfect.
Even the development of an efficient servile State would
mean a clean break with most of them.^

The whole problem is rather technical and highly
complicated. For our purposes it need only be observed
that the county is usually a bad area. It is extremely
indefinite ; it has no sort of regular correspondence with
natural boundaries ; it is too great for intimate local
contact and too small for handling the schemes of those
whose horizon extends beyond the nearest hills. For the
first of these purposes we require (as in fact we have
been learning during the war) the parish, and for the
second a province with natural boundaries ; and when
we consider educational problems the different functions
of the two are obvious. Some of us, it must be admitted,
have advocated for educational administration in the case
of Scotland the county area instead of the parish. But
our purpose there was the mitigation of the evils of local
control. Assuming these to have disappeared, the
suitable areas can be considered on their merits.

[' By a " servile State " — the term is Mr. Belloc's^s understood in contemporary
discussions any society in which differences of economic status, particularly of employer
and employed, are explicitly recognised and enforced as such by law. — W. A.]

394 NATIONAL GUILDS AND THE STATE

That convenient districts may be marked out within
the province need not be denied ; but particularly in
the correlation of secondary and University education
the larger area shows its advantages. At the centre of
any " province " should be a large town ; and when we
consider even existing conditions in these islands such
towns are found to contain a University. There need
not, of course, be only one. And in some cases at least
there are also colleges, the relation of which to the central
University can hardly be settled on general principles,
and will no doubt in the period of transition involve an
enormous amount of detailed work. It need not concern
us here when we remember there will be only one
authority and that an educational one.

Pure as distinct from technical education will then
naturally lead up to the University which is the head
of it, and from the University to various professional
schools and post-graduate colleges. To develop the
provincial administrative area would be comparatively
simple in Scotland, at least as regards education. In
the last dozen years such a system has been in full
operation for the training of teachers. And the case
, of Ireland is not much harder. The provincial division
obtains in name already ; and in this as in some other
matters the rudimentary state of development in Ireland
means at least that no complex local administrative
organisation must be upset because it is on wrong
lines. In England, nominally nothing of the sort exists ;
but in practice a provincial University has marked out
for itself a " sphere of influence " from which it draws
its students, and over the educational policy or develop-
ment of which it exercises a real and increasing influence.
Without a considerable amount of local knowledge,
speculation about detailed arrangements is mere waste
of time ; but I can see nothing in the nature of the case
to present insuperable difficulty.

We must picture then the responsibility for the educa-
tion of the country entrusted to a profession numbering

APPENDIX

395

hundreds of thousands, organised in provinces defined
by natural boundaries, and each containing primary and
secondary schools galore together with one or more Uni-
versities. To argue from existing conditions is more
than usually misleading ; not only do we now possess
a system of government in many respects the exact
opposite of the truth, but we have unhappily become
accustomed to regard our niggardly provision for these
services as extremely generous. Our ideas with regard
to it must undergo a revolution, really comparable only
to our enlightenment when our eyes were opened about
the possible cost of a war — another subject on which,
we imagined, we required no instruction. From this
unexpected outcome of the war there is no escape.
Reconstruction schemes, particularly those of a directly
productive sort, will be reckoned in terms of so many
hours' war. And on this basis their relative cost even
when capitalised will be insignificant. Many of us, no
doubt, will dislike it, but adjustment of ideas is generally
painfuL And until a man sees that expenditure on
education is productive in the most striking ways, and
would be worth while even if it were not, we trust that
he will not be allowed to live without disturbance in a
modern community. In the four Universities of Scot-
land there were before the war some eight thousand
students ; when we see this number trebled we may
be said to have begun. The annual grant to each of
the two Universities founded under the Irish Univer-
sities Act is at present in the neighbourhood of ;^30,ooo.
A government which multiplies it by lo may be said
to have some elementary idea of the cost of a decent
education policy. The research laboratories of the
English colleges are for the most part a disgrace to
the wealthy men that rule them. Their own position
depends on applied research ; but by what sacrifices
has one of them set free a man of genius from the burden
of routine teaching .''

For the advantage of the student one revolution in

396 NATIONAL GUILDS AND THE STATE

University practice is so fundamental that beside it all
the others are insignificant. The hostel system — or at
least the residential system — should be universal. I
shall discuss in a moment the special peculiarities of
Oxford and Cambridge in our system of higher educa-
tion ; but as contrasted with a provincial University,
or (though perhaps to a less extent) with a Scotch
University, a central difference all in favour of the
former is the residential system with its enormous
consequences. Apart from the social life of a University
its academic side falls very flat. The wide expansion
of interests and outlook which ought to be the normal
consequence of University life is encouraged at least
as much (if not far more) by controversy and discussion
as by formal teaching. That the latter is indispensable
I do not deny ; but its indispensability exhausts its
function. Whether a man goes to lectures or not
during his course matters very little ; that he should
submit himself to some kind of regular instruction seems
hardly avoidable ; but that on the material however
acquired he should turn the activities of his soul is the
object of his presence at a University. And such
corporate social life leaves on a man who has lived it
marks which he never altogether loses.

The present organisation of the provincial Univer-
sities causes them simply to lose all this. A limited
group of rather unusual men, particularly in certain
colleges, may succeed in overcoming the usual obstacles
and bringing into being a curiously intense corporate
Hfe. But this type of man would show his talents any-
where ; the ordinary student — about whom, to begin
with, we can only say that he is about the average —
simply never hears of it. He lives in lodgings, which
is probably bad for his body ; or at home, which is
certainly worse for his soul. And apart from accidents
we cannot be sure that he gets out of it all more than a
little information, a degree, and a good deal of weariness.

No cure seems possible for this the glaring defect of

APPENDIX 397

the provincial University, except the residential system.
The peculiar form which it should take seems on the
whole a secondary question. Some other conditions
are primary. One is that the restrictions which are
traditional in Oxford and Cambridge — whatever may
be said for them where they are — are unsuitable for a
provincial University, the students of which should be
given every opportunity of mixing in the political and
social hfe of their city. In Scotland this has been a
tradition of considerable standing ; and its persistence
has rescued many men from death from academic inertia.
To those who say that students should not be encouraged
to take part in political or religious controversy, I reply in
the first place that these are the only subjects really worth
discussing, and in the second that since at the student
stage opinions on such subjects are in a state of solution
from which before long we may hope that a stable but
tolerant point of view may be precipitated, the more
people of diverse views that are met with the better.
The Scotch non -residential system secured this for
people who wanted it. Its other advantage was its
perfect freedom, which compelled a man to carry his
own responsibilities. To carry these advantages over
into the residential system does not seem very difficult.

Oxford and Cambridge, as well as Trinity College,
Dublin, are integral parts of our existing system of
higher education. Something should be said about the
function they may be expected to fulfil in a new order.
Plainly this should include as much as possible of their
ancient tradition. Before the war Oxford and Cam-
bridge had two distinctive features, apart from the
residential system which I have sufficiently discussed
but which was intimately bound up with the first of
them at least, if not also the second. To begin with,
they were the training schools of the governing classes,
and the introduction into them of all sorts of other people
had scarcely done much to alter it. They did not
produce this result by seeking for it, but simply by being

398 NATIONAL GUILDS AND THE STATE

what they were. Perhaps it will be so no longer ; for
even before the war our business men were growing
suspicious and restless. Up to the present, however,
this enormous difference of status remains the most
obvious mark of Oxford and Cambridge. Trinity
College, Dublin, has on the whole the same sort of
characteristics, though to give an exact account of them
requires a little knowledge of the unique conditions of
government in Ireland.

The society which we have in mind throughout this
discussion is one from which a governing class in the
present sense will have vanished, and with it must go
this peculiar class difference. The loss is not great,
if we distinguish it from other features of college
life which are now bound up with it. The resi-
dential system we propose to transfer to the provinces,
while the second distinctive mark of Oxford and Cam-
bridge may remain. They were also in a peculiar
sense Universities — schools of all the sciences. To a
singular extent, especially in all liberal studies, it was
possible in them to do really advanced work. Naturally,
they formed also centres of research. In precisely the
same subjects, however, the curricula of the provincial
Universities — owing to their size, their defective staffing
and equipment, and the needs they required to satisfy —
seldom off^ered many facilities for either the higher learn-
ing or for research, except in applied science. That
something of these characteristics will continue to cling
to the provincial Universities under the best arrange-
ments seems unavoidable. They will be, in the first
instance, teaching institutions giving instruction up to, or
a little beyond, the Honours degree standard, and doing
this regularly and constantly. But for post-graduate
work a man ought to go elsewhere ; and nothing more
fitting could be suggested for Oxford and Cambridge than
that they should be great centres of post-graduate work.
No doubt this involves a considerable alteration in their
character, but it continues their tradition.

APPENDIX 399

If we consider the purpose of much post-graduate
work as it is done at Oxford and Cambridge now, the
continuity appears in another aspect. The men who
come to them now are for the most part about to devote
themselves to pure scholarship, or to become public
men or administrators, and their descendants may be
expected to follow them. Oxford has occasionally (not
without reason) tended to regard herself as a school for
statesmen ; and what she has been in effect she may
become in reality, ministering to a new conception of
what statesmanship is, a conception which is higher
and not lower. In a new society, to fit themselves for
the high administrative posts in all guilds and for most
posts in the civil guilds, men will require a long training
which is not technical. In the same type of college we
may find a place for the pure scholar ; though why the
idea of pure scholarship should be absent from any
University does not appear. Certain subjects, however,
are in their own nature so remote and specialised that
the pursuit of them can never be general ; and yet upon
them on occasion there may depend almost anything.

The application of such ideas as these would, it must
be admitted, transform the spirit of Oxford and Cam-
bridge. A transformed society, on the other hand, is
precisely what we hope for. A certain air of distinction,
no doubt, would pass from the face of these cities ; but
it is a distinction the obverse side of which can be dis-
covered also within their walls ; and is evil enough.

To Trinity College, Dublin, the same remarks apply.
No fate finally more fitting could be found for that
storm-centre of Irish educational controversy. In the
case of higher and post-graduate studies the religious
difficulty, so far as it concerns the internal management
of a University, is largely absent. The Irish University
problem as a whole contains, in fact, nothing peculiar
— nothing, that is, which is not a direct consequence of
difficulties in devising a workable system in the primary
and intermediate stages. Fundamentally, of course.

400 NATIONAL GUILDS AND THE STATE

they concern religion. The adoption of guild principles
would mitigate but not solve them. To the ordinary
educational reformer they present an obstacle which he is
never allowed to forget but which he as regularly consigns
to perdition. But we may console ourselves with the
reflection that it will at least effectually preserve Ireland
from the tyranny of local control. In the Universities
the avoidance of the religious difficulty by the Act of
1 909 seems to be quite successful, and in certain districts
of Ireland at least there is a genuine desire for higher
education. The provincial Universities, which have
their own function to perform, cannot include the whole
of University education. The Irish tradition is closely
allied with some continental Universities in respect of
post-graduate work, and we may suppose it will not die
out. But even its encouragement does not exclude the
provision within the country of facilities for such work.
The situation in Scotland seems peculiar only in one
respect. Its administrative problem is comparatively
simple. For real post-graduate work, however, its
students have been accustomed to proceed to England
or abroad ; and I, at least, see no reason why they should
not continue to do so, Scotland being now for all practical
purposes a part of England. But should national senti-
ment require it, it would be a small matter to establish
a college of that type in Scotland ; though it would be
more difficult to furnish it with a tradition, such as
it had in the eighteenth century. Something might,
however, be done by the reconstruction of St. Andrews.

INDEX

Administration, and Government, 103-
108, 353 j distinct from legislation,
125, 132-136

Advertising, 60, 71, 72

Agriculture, a craft, 41, 42

Amalgamated Society of Engineers, 42,
43 i growth of membership and in-
come, 227, 228

Ambler, Joseph E., letter from, 33, 34,

36. 37. 4-1
Anderson, W., 27, 363, note
Appetitive occupations, 6, 7
Architecture, the, of the future, 67, 68
Army, must be a citizen army, 106
Arnold, Matthew, 35
Art, and local life, 38, 39, 67-69, 75
Australia, Labour Government in, 156

Balfour, A. J., in America, 170

Banking system, 184, 246-25 r

Bastiat, 17

Bebel, 162

Bismarck, 108

Bolshevism, its foreign propaganda, 117,

note i its failure, 351, 352
Brodrick, T., letter from, 33
BuUey, A. K., letter from, 3 j his

objections considered, 4-19, 22
Bureaucracy, the, its present power, 99 ;

change of spirit predicted, 100 ; and

the State, 127-132. See Civil Service

Capitalism, controls consumption, 27, 28,
30, 46 ; the offspring of mediasval
Guilds, 38, 84 J its mission exhausted,
38 ; history of, 84 ; its defence, 85,
86 i its false scale of values, 122 ;
anti-social in principle, 153, 154;
disappears with wage-abolition, 1 54 j
its selfishness during the war, 235 ;
and credit, 237 ; its financial policy,
275-280 ; tenacity of British, 346-
349 i its failure, 357, 358

Census of Production, report, 275, 276

Chamberlain, Joseph, 160, 162

Citizen, not identical with consumer, 25,
27, 56 i must be represented by the
State, 32, 52, 56 ; and Guildsman, 293,

.321, 353

Citizenship, 10 1- 103

" Civic element," the, 51, 52

Civil Guilds, 7, 18, 19, 49, 131- 13 3,
140 ; and the Civil Service, 294-299

Civil Servants, Society of, its aims and
origin, 307-310, 315, 317, 318

Civil Service, the, rights of, 100, 107 ;
system of payment, 132 ; and the
State, 292-299 ; and the Civil Guilds,
294-299 J evils of Treasury control,
299-306 ; status of civil servants,
306-313; associations in, 313-315.
See Bureaucracy

Civil Service Clerical Alliance, on the
Treasury, 303, 304; its objects, 309 ;
its membership, 315 ; its policy, 316,

317
Civil Service Guild, 313-320
Classes, chart of, 283
Class-struggle, the, 81 sqq. ; distin-
guished from class-war, 81-84
Clyde, labour trouble, 197, 198, 201, 223,

224
Cole, G. D. H., on the State and the
consumer, 22, 23, 26, 29, 30, 49-62,
97, loi, 107, 123-126, 132-139, 141,
352 ; on unemployment, 269
Collective contract, 179-185, 214, 217
Compensation, 93; principles of, 281-291 5
new definition of, 284 ; based on real
value, 286-289
Constantinides, T., letter from, 50
Consular Service, the, 120
Consumer, the, and producer, 17-19, 22-
24, 26, 31, 32,47, 48, 50, 59, 60, 124-
126 ; the State not concerned with,
18, 19, 22-24, 57, 58 j not same as
user, 23, 24, 50-55 ; Mr. Cole's
views on, discussed, 23-32, 49-62,
124-126, 134-137; definition of,
24-26, 50, 51 ; not identical with

401 2 D

402 NATIONAL GUILDS AND THE STATE

citizen, 25, 27, 56 ; different classes
of, 25-27 j will become more fastidious,
4.8, 60, 61

Consumption, final and intermediate, 25-
27, 29-32 ; the complement of pro-
duction, 30, 52, 133, 136

Co-operative Movement, Fabian reports
on, 22, 30, 72, 73, 78 ; compared with
the small shop, 73, 74 ; its finance,
78 ; incompatible with the Guilds, 78

Co-operative Societies, statistics, 64

Co-operative Wholesale Society, a pro-
fiteering society, 17 ; its employees
producers, 78 ; its function during a
strike, 211

Cotton Control Board, its unemploy-
ment policy, 268-270

County Councils, hamper parish life, 70

Craftsmanship, 35-38 ; and engineering,
36, 37, 43 ; in agriculture and sea-
manship, 41, 42 ; under the Guilds,
44, 45, 67-69, 354-356

Crane, Walter, 35

Credit, and the gold standard, 245-251,
275-280

Croce, Benedetto, quoted, 96, iii, 113,
114

Cunliffe, Lord, 276, 278

Currency and Foreign Exchange, Com-
mittee on, 276

Democracy, incompatible with monarchy,
162, 163 J adopted in principle by
politicians, 170

Dilke, Sir Charles, 157-159, 162

Dilution, 169, 251-264; male, 253,
254 ; female, 254-263 ; inferences,
263, 264

Diplomatic service, an aristocratic pre-
serve, 115-117; in a democratic
State, 1 17-120

Discipline, in the Guilds, 14, 15 ; dis-
tinguished from eiSciency, 15, 16

Distribution, 63-79 ; definition of, 64 ;
must be equitable, 64 ; intimately
concerned with domestic life, 65 ;
the final stage of production, 66, 74,
76 ; connection with municipal life,
66, 75 ; must be controlled by the
Guilds, 76

Distributive Guild, a, suggested, 59, 61,
62, 76-79 ; will absorb the multiple
shop, 74 ; its constituents, 77

Dublin, Trinity College, 397-399

Economic power, dominates politics,
109, no, 150, 153 ; will be replaced
by principle, in ; to be concentrated

in the Guilds, 138 ; becomes national

with wage-abolition, 154
Economic problems, their true value,

121, 122
Education, and the teacher, problem of,

321-328 ; growth of Guild principles

in. 327. 333

Education Guild, 321-336

Educational Institute of Scotland, code
of professional etiquette, 330 ; Scot-
tish Education Reform Committee,
381

Efficiency, under the Guilds, 11- 15

Executive, and administrative authority
confused, 104

Expropriation, principles of, 281-291

Fabian reform proposals, 283, 286, 303

Fabian Research Department, 3, 11 ;
reports on Co-operation and municipal
enterprise, 22, 27, 29, 30, 72, 73, 78

Fatigue, report on, 259, 260

Federal principle, 122, 123

Finance, under the Guilds, 77, 78 ; in
the Co-operative movement, 78 ; its
importance in the labour revolution,
2TO ; the capitalist policy, 275-280

Foreman, the, his position and future,
176-179

Gallacher and Paton, Messrs., on work-
shop control and collective contract,
180-185,204,205. 5ee also Paton, J.
German philosophy, egotism in, 112-114
Gold and credit, 245-251, 276-280
Governing classes, the, 159-166
Government, the, and the State, 97-108,

353 ; function in, 132-137
Green, Romney, 36
Guild Congress, 9, 10, 18, 19, 26, 27, 31,

48, no, 1Z4, 125, 134, 140, 141
Guilds, mediaeval, contrasted with
National Guilds, 37, 38 ; craftsman-
ship in, 354, 355
Guilds, National, their underlying theory,
4, 172 ; no motive for profiteering,
7-9 ; no " opposed " interests between,
10 ; efficiency in, 11-14 ; no " vested
interest " in, 14 ; discipline in, 14,
15 5 the question of motive, 15 ;
disputes between Guilds, 26, '27 ; must
represent all consumers, 29 ; contrasted
with mediaeval Guilds, 37, 38 ; crafts-
manship protected under, 45, 69 ;
technical training under, 46, 322, 323 ;
production under, 45-48 ; relation of
the State to, 52, 53, 55-58, 75, 76,
96 sqq^ ; adjustment of prices, 57, 58 ;

INDEX

403

and distribution, 66 ; finance, 77, 78 ;
incompatible witli Co-operation, 78 ;
welcome the non- manual functions,
86 j and personality, 92 ; bureaucracy
under, 100, 129 ; presuppose a nation,
10 1 ; complete the process of democra-
tisation, 103 ; Guild principle in
government departments, loj ; will
control labour-power, not wealth, no ;
their international relations, 118-121 ;
diplomatic service under, 119, 120;
will control the Consular Service, 120 j
legislative functions of, 126 ; relations
with the State, 139-142 ; their repre-
sentation in Parliament, 139, 140;
the spiritual State and, 356. See
Civil Guilds, etc.
Guildsman and Citizen, 293, 321, 353

Haldane, Lord, 310
Hobhouse, Professor, 41
Home-building, women and, 261-263

Income-tax, 286

India, ** prosperity " of, 236

Industrial Guilds, responsible for the

Budget, 131, 132, 140 ; relations with

Civil Guilds, 141, 142
Industrial Health and Efficiency, report

on, 259
Industrial unrest, reports on, 188-192,

195 j during the war, 194, 195
Infiation of currency, 249, 250
Irjeland, sense of nationality in, 102 ;

bureaucracy in, 128 ; Universities in,

394. 395. 399. 400
Iron and Steel Trades Confederation,
award on sample passers, 238-242

Jackson, Godfrey, letter from, 3, 4
Japan, " prosperity " of, 236
Johnson, T. B., quoted, 148
Jones, J. H., on the Clyde troubles, 201,
202

Kitson, Arthur, quoted, 246

Labour Advisory Committees, 231, 232
Labour, commodity theory rejected, 4, 5 ;
recognised as a function, 10 j under
State socialism, 18 i skilled and semi-
skilled, 41-45, 234, 253, 254 ; and
capitalist organisation compared, 1 54 ;
its political action discussed, 155-159 i
its failure in Parliament, 188 j in-
fluence of the war on, 193-198, 226
sqg. i in the Administration, 231, 232 ;
spirit of rank and file, 232, 233 ;

moral lessons of the war for, 234-236 ;
and credit, 245-251, 275, 279, 280;
effect of dilution on, 251-264. See
Trade Unions

Labour, Ministry of, 232, 237, 238

Labour monopoly, a fundamental neces-
sity. 44. 46

Law, industrial, transferred to the Guilds,
142

Legal Guild, 342-344

Legislation, separate from administration,

i?S. 13s. 136

Lenin, 351

Liberty, personal, and the functional
principle, 93-95

Lichnowsky, Prince, 116

Lister, Charles, 163-165

LitvinofF, M., quoted, 80, 82

Local Ufe, art and, 38 ; growth of,
necessary, 39 ; and distribution, 66,
67 ; indispensable for art craftsman-
ship, 67 ; its vitality, 68 ; revival of,
79 ; weakness of local sentiment, 200,
201

Local organisation, its benefits, 199

London University, 383

Luxury trades, 283

Machinery, welcomed by workers, 20
Machinery of Government Committee,

report, 295, 296, 299-303, 310, 311
Maeztu, Ramiro de, quoted, 80-82, 92,

94. 97-99. 121. I2Z. 167, 278, 296
Mallon, Mr,, quoted, 28, 29
Management, resident in the master-
class, 84 ; Mr. Webb on, 86
Manchester Guardian^ The, letter by " H "

in,quoted, 33, 41
Man power, and the war, 167, 168
Marx, Karl, 99, loi
Master-class, the, its contributions to

society, 84, 85, 87-92
Matthews, J. H., letter from, 19-21
Mazzini, 102
Medical Guild, 337-342
Medical profession, its powers, 337-338
Mellor, Mr., 1 1
Mercantile Marine Law, based on public

policy, 55
Merchant Service Guild, 42
Miners* Reform Committees, 233
Monahan, J. C, 304-306
Monarchy, incompatible with democracy,

162, 163
Motive, under the Guild system, 15, 16;

under Capitalism, 16
Multiple shops, 74
Municipal life and policy, concerned with

404 NATIONAL GUILDS AND THE STATE

distribution, 66 ; a transformation

prophesied, 67 ; note on, 69-71
Municipal Officers' Guild, 3Z0
Municipal service, 319, 320
Municipal trading, 71
Munitions Acts, the, 194 ; resented by

Labour, 194-196, 198, 223, 224
Murphy, J. T., on the new shop-steward

movement, 203-205

Nation, the, and the State, loi, 109

Nation, The, quoted, 33, 148

National Guilds League, 3, 11 j report

of Vigilance Committee, 80, 8 1
Nationality, sense of, loi, 102
National Union of Railwaymen, growth

of membership, 227 j increase of

funds, 228 ; recognition of " District

Councils," etc., 233
National Union of Teachers, its policy,

325. 326, 333, 334

Obser'ver, The, quoted, 147
Orthopaedic hospitals, 340
Oscar, King, of Sweden, on Socialism, 1 64
Oxford and Cambridge, peculiar position
of. 395-399

Parish life, hampered by the County

Councils, 70 ; revival of, 70, y^, 79
Parliament, problem of, 123 ; Guild

representation in 139, 140 j failure of

Labour in, 188
Paton, J., memorandum on workshop

committees, 222-225. •Seea/mGallacher

and Paton
Payment by results, 211, 212, 283
Personality, marked in the master-class,

87-90 ; two stories illustrative of, 88-

92 ; in work, 92
Pohce, the, 319
Politics, its true sphere, 109 ; dominated

by economic power, 109, no, 150,

153 J revolutionised by wage-abolition,

153-155; Labour and, 155-157;

conventional politics illustrated by

life of Dilke, 157-159
Portsmouth Dockyard, use of machinery

in, 19, 20
Possessing classes, their four divisions,

283 ; their social value, 286-290
Post office, the, ought to become a Civil

Guild, 54 ; State control of, based on

public policy, 54, ^$ ; associations in,

313, 314 ; its status, 314
Powell, Dr. Ellis T., quoted, 276-278
Producer, definition of the term, 4 ;

distinction between producers and

non-producers, 5, 6 ; not inefficient,
11-14; must control production, 30,
46-48 ; and the consumer, 17-19, 22-
24, 26, 31, 32, 47, 48, 50, 59, 60,
124-126, 134 ; perversion of the term,
34, 35 ; skilled and unskilled producers,
41 i creates demand, 47, 48, 59, 60

Production, must be controlled by pro-
ducer, 30, 46-48 j the complement of
consumption, 30, 52, 133, 136; quali-
tative, 35, 36, 39-41, 355, 356; large
scale, 37, 39, 40, 43 ; increased, the
property of Labour, 237

Professional classes, 289, 290

Profiteering, origin of the word, 8 ; its
two meanings, 8, 272 ; no motive for,
in Guilds, 10 ; not the only motive
for work, 16 j Co-operation and, 17 ;
discussion of, 272-280

Province, the future municipal unit, 70,

71. 75
Public amenities, 55, 56
Public policy, scope of, 53-55 ; will

guide disposal of products by Guilds,

Railway Clerks' Association, 242-244
Railways, and public policy, 54
Rationing, 169, 170
Raw materials, and workshop control,

220
Reckitt, M. B., letter from, 63
Reckitt and Bechhofer, on workshop

control, 219, 221
Renold, Hans, Ltd., works committee at,

.175

Ribblesdale, Lord, 163, 164

Richardson, Arthur, M.P., on distribu-
tion, 63, 72

Robieson, M. W., 278 ; on University
reconstruction, 329, 330, 363-400

Rodd, Sir Reimell, 164

Round Table, The, quoted, 270-273

Rubakin, Nikolai, 83

Russia, the Revolution in, 83

Santayana, G., on German Philosophy,

112-114
Seamanship, a craft, 41, 42
Shackleton, Sir David, 231
Shaw, Bernard, his criticism of Guild

theory, 22, 26, 29, 30
Shopkeeper, the small, doomed, 72 ; in

the hands of the capitalist, 72, 73, 283,

note
Shop-steward movement, two meanings

of the term, 185, 186 ) origin of the

new movement, 186, 187, 192-199 ;

INDEX

405

transfers authority to the workshop,
202, 203 i its main objects, 203, 206 ;
and trade-union structure, 205-211

Sinclair, Upton, his Jungle, 40

Soviet system, its failure, 84, 351, 352

Spiritual life, influence of the State on,
111-112

Spiritual State, the, 108-115, 349-353 ;
and the Guilds, 356-359

State, the, scope for action, 18, 19 ;
relations with the consumer, 18, 19,
22-24, ^9) 57i 5^ i must represent the
citizen, 25, 32, 52, 56 ; its relation to
the Guilds, 52, 53, 55-58, 75, 76, 96
sqq., 139-142 ; limits of intervention,
57, 58, 61 ; must not control dis-
tribution, 75, 76 ; independent of
Guild Congress, 96 ; Guild theories
of, 97-101 ; its relations with Govern-
ment, 97-108, 133, 353; its evil
repute, 98 ; the mouthpiece of citizens,
105, 106 ; its spiritual attributes,
108-115 (see Spiritual State); its
immoral methods condemned, 108 ;
interaction between nation and, 109 ;
its external relations, 115-121 ; its
relations with subject races, 120, 121 ;
its r61e, 121-127, 133, 293, 321, 322 ;
illustrative diagram, 127 ; and the
bureaucrat, 129-132 ; industrial law
removed from its administration, 142 ;
its intervention in the war, 193, 235 ;
revolts against, 351, 352

State Socialism, retains wagery, 1 8 ; and
labour as a commodity, 1 8

Stratification of control, 20

Subjective rights, 92-95

Sugden, Larner, 68

Supply and demand, a psychological
question, 59

TafF Vale judgment, the, 188
Taxation, and the Guilds, 140, 141
Teacher, status of the, 323-328
Teachers' Registration Council, 334, 335
Technical training, to be transferred to the

Guilds, 46, 322, 323
Temple, John, story of, 88-92
Thomas, J. H., 302, 311
Time-payment, 211, 212, 283
Townshend, Mrs. E., on the consumer,

+9 . , .

Trade organisation, national importance

of, 42 ; and capitalist organisation

compared, 153-154
Trade Union amalgamation, and the

shop-steward movement, 199 sqq., 230 ;

projects of, 230, 231

Trade Unions, and Liberalism, 188 ;
unrest in, 190 ; loss of prestige, 190 ;
defects of centralisation in, 199, 200 ;
the branch and the shop-steward
movement, 202 sqq, ; national and
local compared, 207, 208 ; importance
of finance, 210; their personnel
inadequate for future needs, 216, 217 ;
question of compulsory membership,
221, 222 ; growth of, during war, 227-
229 ; growth of " unskilled " unions,
227 ; spirit of rank and file, 232, 233 ;
and unemployment, 266

Transit, objections to State control of,

75.76
Treasury, the, its function and reform,

299-3°6> 311-313
Triple Industrial Alliance, the, formation
of, 230

Unemployment, 264-271
University education, and the Guilds,
329 ; reorganisation of, 363-400

Value, real, 286-289
Vassar-Smith, Sir R., 277, 279

Wage-abolition, its meaning, 8 ; will
increase motive for production, 16 ;
means a larger consumptive demand,
67 ; the foundation of National Guilds,
8r ; its eflFect on international rela-
tions, 118 ; its effect on politics, 153-

157
Wage-earner, the, an intermediate con-
sumer, 28, 35 i not a producer, 35
Wage-system, inevitably inefficient, 12 ;

deductions from it misleading, 12 ;

remains under State Socialism, 18
Wages, inequalities of, 211-216; effect

of war on, 229
Wales, report on industrial unrest in,

189, 196, 197
War, its effects, 166-171 ; blunders of

war legislation,' 198 ; its influence on

Labour, 226 sqq.
Wealth, not controlled by the Guilds,

no
Webb, Sidney, on the works-manager,

86
Webb, Sidney and Beatrice, on the

Co-operative movement, 63, 72, 73,

78
Webb, Mrs. Sidney, 302, 311
Whitley Report, the, 81, 147 ; Guild

criticism of, 172, 283 ; as affecting

the Civil Service, 316-319
Wilson, Tom, story of, 90-92

4o6 NATIONAL GUILDS AND THE STATE

Withers, Hartley, quoted, 248

Women, in engineering shops, 42 ; in
industry, 254-264 ; and home-building,
261-263

Workers' Educational Association, 383

Works Committees, 173, 174 j opinions
of employers on, 174 j have no active
function, 174, 175; relations with the
foreman, 176-178. See Workshop
Control

Workshop, the new industrial unit, 199-
206

Workshop control, and qualitative pro-
duction, 40 ; whole and part control,
172, 219 ; Guild principle of, 172 ;

retrospect, 173 ; unaffected by Works
Committees, 174, 175 ; Messrs.
Gallacher and Paton on, 180-185 ;
effect of collective contract on, 182-
185; and the new shop -steward
movement, 185 sqq. ; its psychological
aspect, 218, 219; joint control, 219-
220 ; and raw materials, 220 j implies
continuous employment, 220, 221 ; and
compulsory unionism, 221, 222 ; Mr.
J. Paton on, 222-225 j compared with
control in the Civil Service, 311, 312

Yorkshire Area, Industrial Unrest in the,
report of Commissioners, 28

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